BERLIN: German investor sentiment jumped to its highest level in two decades in May on hopes that consumers will send growth soaring once Europe's biggest economy finally reopens shops, bars and restaurants.

The ZEW institute's monthly barometer measuring economic expectations rose 13.7 points in May to 84.4, its highest reading since 2000 and by far the highest since the beginning of the pandemic, data showed on Tuesday.

"The slowing down of the third COVID-19 wave has made financial market experts even more optimistic," said ZEW president Achim Wambach in a statement.

"The experts expect a significant economic upswing in the coming six months," he added.

Restaurants, bars, gyms and cultural venues have been closed since November and shops since December in Germany, which was still battling with a third wave of infections and a slow vaccine rollout in the first few months of the year.

The inoculation drive has dramatically accelerated in recent weeks, with almost a third of the population now having received at least one jab.

Meanwhile, a gradual decline in infection rates led Health Minister Jens Spahn to declare last week that the third wave "appears to have broken".

ZEW's assessment of the current economic situation in Germany jumped by 8.7 points to minus 40.1 -- a marked improvement on the previous month but still deep in negative territory.

The government also expects an economic upswing in the second quarter, having revised its GDP growth forecast for 2021 from 3 percent up to 3.5 percent at the end of April.