German investors have turned more optimistic about the next six months than they have been for much of this year, reflecting a growing belief that an economic turnaround is imminent as inflation falls and interest rates stabilise.

The brightening of investor sentiment is at odds with recent gloomy data pointing to a contraction in German output this year, but economists said the upswing in outlook reflected a sense that the most challenging conditions were set to ease.

The ZEW Institute’s monthly survey of investors in Europe’s largest economy found their outlook had brightened the most since March. Its index of German economic expectations jumped to 9.8 in November, up from minus 1.1 in October. That was higher than the reading of 5 forecast by economists in a Reuters poll.