Germany’s ZEW Indicator of Economic Sentiment jumped to 59.6 in January 2026, marking its highest reading since July 2021 and well above market expectations of 50. Investors are optimistic that 2026 could signal a turning point for the economy. The recently finalized Mercosur trade agreement is also expected to bolster prospects for export-intensive sectors, even as the uncertainty surrounding US trade policy continues to weigh on exporters. Export-oriented industries have shown notable improvements. Sentiment balances in the steel and metal industries and mechanical engineering rose by 18.2 and 22.7 points, respectively. The automotive sector’s balance improved by 16.5 points to -5.5, while the chemical and pharmaceutical industries and electrical engineering saw increases of 12.4 and 14.0 points. The assessment of the current economic situation also strengthened, with the index climbing 8.3 points to -72.7, surpassing expectations of -75.5.
