Is the German ZEW signaling recovery?

Last night saw an impressive rise the German ZEW survey, as DFM recounted this morning. I thought I take a look and see what it can tell us about the prospects for German growth.

The current situation was flat but tends to lags growth slightly, as you’d expect:

Here is the expectations component (which saw the big jump) charted against GDP (in yellow):

The expectations index has a good record of leading growth but its absolute level remains consistent with current growth rates. Next month will be interesting.