In its monthly report for February published this morning the Bundesbank noted signs of improvement in the global economy and revealed expectations that the German economy will register growth in the first quarter after the contraction seen at the end of last year.

The German central bank commented that there have been "increasing signs in recent months that the global economy is gradually picking up momentum" and pointed out that economic expectations in Germany have recovered "to a remarkable degree over the past three months." The Bundesbank further explained that the "marked turnaround in sentiment" was due to the reduced levels of uncertainty in the Eurozone.

In this context, the Bundesbank affirmed that "an increase in overall economic output can be expected in the first quarter of 2013," basing its argument particularly on the improvement in the German industrial sector.

For the rest of the year, the German central bank noted signs that "economic activity will gradually pick up the pace", although it admitted that the "external environment should not be expected to kick-start a very strong surge in demand."

JM

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