Confidence in Germany slips over 3 months
By Geir Moulson |
July 14, 2010, Wednesday
|
Print Edition
Print Edition
German investor confidence dropped for the third consecutive month on fears about the implications for the economy of Europe's debt crisis and budget-tightening drives, a survey showed yesterday.
The ZEW institute said its confidence index, which measures investors' economic outlook for the next six months, was down 7.5 points for July to 21.2 - the lowest level since April 2009, when it stood at 13 points.
The decline was less sharp than the 17-point tumble in June but left it below the historical average of 27.4 points. It was worse than economists' expectations of a shallower fall to 25.3.
The German economy, Europe's biggest, has settled into modest growth over the past year as an improving global economy boosted its exports - its traditional strength.
A subindex of the ZEW survey measuring investors' view of the current economic situation rose by a strong 22.5 points in July, taking it to 14.6 points, the highest level since July 2008.
However, the eurozone's debt crisis, and resulting government austerity drives in several countries including Germany, have raised concerns about future growth.
"The considerable improvement in the economic situation together with the decline in expectations signals that - until the end of this year - the potential for further improvements of the German economy seems to be widely used up," ZEW said in a statement.
"Particularly the crisis in sovereign debt and the resulting need for consolidation of budgets in various countries seem to have contributed to the subdued economic expectations," it added.
The ZEW institute said its confidence index, which measures investors' economic outlook for the next six months, was down 7.5 points for July to 21.2 - the lowest level since April 2009, when it stood at 13 points.
The decline was less sharp than the 17-point tumble in June but left it below the historical average of 27.4 points. It was worse than economists' expectations of a shallower fall to 25.3.
The German economy, Europe's biggest, has settled into modest growth over the past year as an improving global economy boosted its exports - its traditional strength.
A subindex of the ZEW survey measuring investors' view of the current economic situation rose by a strong 22.5 points in July, taking it to 14.6 points, the highest level since July 2008.
However, the eurozone's debt crisis, and resulting government austerity drives in several countries including Germany, have raised concerns about future growth.
"The considerable improvement in the economic situation together with the decline in expectations signals that - until the end of this year - the potential for further improvements of the German economy seems to be widely used up," ZEW said in a statement.
"Particularly the crisis in sovereign debt and the resulting need for consolidation of budgets in various countries seem to have contributed to the subdued economic expectations," it added.
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