Germans Optimistic as Economy Expands

Economic optimism is high in Germany, as confidence among investors hit a 17-month high in August.

An increase in domestic demand, which rose 0.3 per cent from the first quarter, has seen Europe's largest economy expand in the second quarter for the first time in nine months.

Figures from the Mannheim-based ZEW Centre for European Economic Research (EER) reveal that the expectations indicator index jumped from 37 to 50 in July.

The index took its data from a poll of 322 investors and analysts, and suggests there are high hopes of an economic revival in the second half of the year.

Ralph Solveen, an economist at Commerzbank AG in Frankfurt told Bloomberg: "The second half will be better, though we may not get a self-sustaining recovery.

"Growth is becoming more broadly based, but private consumption isn't getting any better.'

A potential change in government may have also fuelled the economic optimism, however many economists fear the global rise in the cost of oil may affect consumer spending, and further delay its long-awaited increase.