UPDATE 2-"Not so bad after all": German investor morale gains on export hopes

* Investor morale rises for second month running

* Improved export expectations drive increase

* DIHK survey also points to firmer export expectations (Adds DIHK survey, detail)

BERLIN, Jan 19 (Reuters) - Investor sentiment in Germany rose by more than expected in January as hopes of improved exports outweighed concern about the impact of coronavirus lockdown measures in a fresh sign of resilience in Europe’s largest economy.

Unprecedented government rescue and stimulus measures helped lessen the shock of the pandemic in Germany last year, when the economy shrank by 5.0%, less than expected and a smaller contraction than during the global financial crisis.

January’s rise in investor morale - the second in a row - added to signs that the economy is holding up well despite tight lockdown measures, which Chancellor Angela Merkel wants to extend into February.

The ZEW economic research institute said on Tuesday its survey of investor economic sentiment increased to 61.8 in January from 55.0 points the previous month. A Reuters poll had forecast a rise to 60.0.

ZEW President Achim Wambach said: “Despite the uncertainty about the further course of the lockdown, the economic outlook for the German economy has improved slightly,” adding that “export expectations in particular have risen significantly.”

A separate survey of 2,000 businesses by the DIHK chambers of commerce conducted at the start of the year showed that 30% of industrial firms expect export business to improve and 22% for it to deteriorate. In the autumn of 2020, 26% expected better exports overall, and 30% worse.

“It doesn’t look so bad after all,” Thomas Gitzel, an economist at VP Bank Group, said after the ZEW release. “The labour market is doing relatively well in view of the adverse circumstances and industry is increasingly gaining momentum.”

Earlier this month, Daimler Chief Executive Ola Kaellenius said the German carmaker was starting the year with optimism after a strong finish to 2020.

Data released earlier this month showed that German industrial output, exports and retail sales all rose in November. Jobless numbers also fell last month.

“In particular, export-oriented German industry sees a strong, global recovery coming through the new vaccines in spring and summer and is correspondingly confident,” said Michael Holstein, economist at DZ BANK.

The Bundesbank said on Monday the economy is managing to stay afloat but could suffer a “sizeable setback” if coronavirus curbs are extended again.

A separate ZEW gauge of current conditions edged up to -66.4 from -66.5 points the previous month. That compared with a consensus forecast of -68.5 points.

Merkel is set to agree with regional leaders to extend a lockdown for most shops and schools until mid-February as part of a package of steps to try to rein in the coronavirus, sources said before talks on Tuesday.

The German government needed 40% less net new debt than originally planned in 2020 as the pandemic proved less of a strain on the public finances than projected, a government document showed. (Reporting by Paul Carrel; editing by Thomas Seythal, Larry King and Nick Macfie)