A leading confidence index in Germany published today edged higher for the third month in a row in March.
The ZEW economic research institute's economic expectations index, based on a poll of 313 analysts and institutional investors, rose by 2.7 points to plus 17.7 points in March, ZEW said in a statement.
The index had already confounded expectations by rising in January and February and analysts had been expecting the March reading to show a corrective decline to plus 12 points.
The findings appear to offer some hope for the beleaguered German economy, the worst performing in the 12-country euro zone.
"There is cautious optimism for the second half of 2003," ZEW said, even if "expectations of an imminent war in Iraq and further falls on the stock markets are weighing on sentiment".
Helping buoy sentiment in the global gloom was the recent quarter-point cut in interest rates by the European Central Bank, ZEW said.
Furthermore, last week's state-of-the-nation speech by Chancellor Gerhard Schroeder "has also contributed to the slight increase in the index," it estimated.
In a speech to parliament last Friday, Mr Schroeder unveiled a programme of measures aimed at helping steering the German economy out of its current slump.
AFP