By Maria Martinez 
 

German economic expectations improved strongly in January and reached their highest level since 2015, the ZEW economic research institute said Tuesday.

Economic expectations rose in January to 26.7 points, its highest value since July 2015, from 10.7 points in December, the ZEW said. The outcome was much better than economists' consensus forecast of 15 points in The Wall Street Journal's survey.

ZEW President Achim Wambach said the sharp increase is due to better-than-expected development of the German economy in 2019 and to the resolution of the trade dispute between the United States and China.

"This gives rise to the hope that the trade dispute's negative effects on the German economy will be less pronounced than previously thought," Mr. Wambach said.

The ZEW's assessment of the current situation in Europe's largest economy has also improved, up to minus 9.5 points in January from minus 19.9 points in December, the institute said. The reading beat economists' forecast of a rise to minus 13.5 points.

"Although the outlook has improved, growth is still expected to remain below average," Mr. Wambach said.

Write to Maria Martinez at maria.martinez@wsj.com

(END) Dow Jones Newswires

January 21, 2020 05:36 ET (10:36 GMT)