BERLIN, Oct. 17 (Xinhua) -- Sentiment among economists in Germany has improved, with the indicator for economic expectations jumping by 10.3 points month-on-month in October, the Leibniz Center for European Economic Research (ZEW) said on Tuesday.
"It seems that we have passed the lowest point," said ZEW president Achim Wambach. Experts expect German inflation to fall further, he said, while assuming "stable short-term interest rates in the euro area."
However, negative factors such as the Israel conflict have "limited impact on the overall more optimistic outlook," Wambach added.
Inflation in Europe's largest economy slowed considerably in September to 4.5 percent, the lowest level since the start of the Russia-Ukraine conflict, according to official data. The increase in energy prices, which had long been a driver of inflation, was only 1 percent.
In order to push inflation below its 2 percent target, the European Central Bank (ECB) has already raised its key interest rate in ten steps to 4.5 percent, the highest level since the euro currency was introduced in 1999.
According to ZEW, economists' expectations for economic development in the euro zone have now increased by as much as 11.2 points, returning to positive territory at 2.3 points.
Alfred Kammer, director of the European department at the International Monetary Fund (IMF), called on central banks to "keep their restrictive stance for a considerable amount of time to be sure that inflation is coming down to target." He added that they should "avoid premature easing."
The IMF has recently lowered its forecast for the German economy, and along with the German government and leading economic institutes in the country, expects a recession this year. Nevertheless, in 2024 the economy is forecast to recover with a growth of 0.9 percent.
The German government even expects the economy to grow by 1.3 percent next year, as a result of rising real incomes. "The stage is now set for a sustainable economic recovery," said Minister for Economic Affairs and Climate Action Robert Habeck. ■