March reading of 31.7 points vs 20.5 forecast
Rise due to ECB rate cut expectations

BERLIN, March 19 Reuters German investor morale improved more than expected in March on expectations of an ECB interest rates cut and positive signs out of China, the ZEW economic research institute said on Tuesday.

ZEW reported a rise in its economic sentiment index to 31.7 points from 19.9 in February, and the March figure exceeded analyst estimates in a Reuters poll for a reading of 20.5.

More than 80 of those surveyed anticipate that the ECB will cut interest rates in the next six months, said ZEW President Achim Wambach, adding that this could explain a more optimistic outlook for the construction industry.

The German export sector benefits from the increased economic expectations for China as well as the expected depreciation of the dollar against the euro, he added.

Data on Monday showed that China39;s factory output and retail sales beat expectations in the JanuaryFebruary period, joining recent betterthanexpected exports and consumer inflation indicators that together marked a solid start to this year.

By comparison, ZEW39;s assessment of the current situation improved only slightly, rising to 80.5 from 81.7 last month and beating a fall to 82.0 that was predicted by analysts.

VP Bank chief economist Thomas Gitzel said the rise in both numbers was positive news for Europe39;s largest economy and was a reason to hope for improvement in the summer months.

The German…