German investors rein in confidence levels

German analysts and investors see further growth potential for Europe’s biggest economy, though its already strong base means any further improvement may be limited, the ZEW think-tank’s April survey showed yesterday.

The institute said its monthly survey of economic sentiment fell to 53.3 points from 54.8 in March, undershooting a Reuters consensus forecast of 55.3 points.

That was the indicator’s first fall since October, but a separate gauge of conditions soared to 70.2 points from 55.1 in March, easily beating a consensus forecast for a reading of 56.0.

“Germany is doing fine. In fact, it may now be doing so well some observers believe it can’t get much better,” said Berenberg economist Holger Schmieding.

ZEW said that the world economy was dampening Germany’s export prospects and reducing the potential for further improvement, and some economists also cited concerns about Greece’s debt crisis as a factor in investors’ weaker expectations.

However, ZEW economists said the investors expected a very good situation to continue for at least the next half year and noted that German private consumption, seen as the mainstay of growth this year, would strengthen further.