* ZEW’s economic sentiment index rises to 6.2 points
* Better than Reuters consensus forecast of 4.3 points
* ZEW head says survey shows “robust economic activity” (Adds analyst, background)
By Michael Nienaber
BERLIN, Oct 11 (Reuters) - The mood among German investors and analysts improved more than expected in October, a survey showed on Tuesday, suggesting traders are more upbeat about the growth prospects of Europe’s biggest economy for the coming months.
The surprisingly strong data further eased concerns that the German economy could be heading towards a sharp slowdown in the second half of the year, after industrial orders and factory output for August came in far better than expected.
“If you look at German economic news, only two words are needed to summarise them: Everything rises,” VP Bank economist Thomas Gitzel said, adding that German growth was likely to surprise on the upside in the second half.
Mannheim-based ZEW said its measure of investors’ assessment of the economy’s current conditions jumped to 59.5 points from 55.1 in September. This was stronger than the Reuters consensus forecast which predicted a reading of 55.5.
A separate monthly survey of economic sentiment showed a rise in the index to 6.2 points in October after an unchanged reading of 0.5 points the previous month. This was also better than the Reuters consensus forecast for a reading of 4.3.
“The improved economic sentiment is a sign of a relatively robust economic activity in Germany”, ZEW President Achim Wambach said in a statement.
“However, positive impulses from industry and exports should not distract from existing political risks,” Wambach added. “In particular, the risks concerning the German banking sector are currently a burden to the economic outlook.”
Deutsche Bank, Germany’s biggest lender, is grappling with a confidence crisis following U.S. authorities’ demands for up to $14 billion to settle allegations it mis-sold mortgage-backed securities.
The German economy, which has weathered several external shocks, including Britain’s decision to leave the European Union, will grow slightly faster than originally expected this year due to higher state spending on migrants and soaring private consumption.
The government last week lifted its 2016 growth forecast to 1.8 percent from 1.7 percent previously, which would be the strongest expansion rate in half a decade. Leading economic institutes are even predicting a growth rate of 1.9 percent.
For 2017, the government expects a slowdown in growth to 1.4 percent due to sluggish foreign demand. But adjusted for the number of work days, the cooling is expected to be less severe with a predicted growth rate of 1.6 percent in 2017.
The ZEW index was based on a survey of 213 analysts and investors conducted between Sept. 26 and October 10. (Reporting by Michael Nienaber; Editing by Dominic Evans)