German Economic Confidence Tumbles To 10-month Low
22 August 2017 - 9:40AM
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Germany's economic confidence weakened for the third straight
month to hit a 10-month low in August, reflecting weak exports and
scandals in the auto sector.
The ZEW Indicator of Economic Sentiment declined to 10.0 in
August from 17.5 in July, survey data from the Mannheim-based
Centre for European Economic Research/ZEW showed Tuesday.
This was the lowest score since October 2016, when the reading
was 6.2. The indicator has remained significantly below the
long-term average of 23.8 points and the expected level of
15.0.
Meanwhile, the assessment of the current economic situation
improved unexpectedly in August. The corresponding index rose to
86.7 from 86.4 in July, while it was forecast to drop to 85.2.
ZEW President Achim Wambach attributed the significant decrease
of the ZEW economic sentiment indicator to the high degree of
nervousness over the future path of growth in Germany.
"Both weaker than expected German exports as well as the
widening scandal in the German automobile sector in particular have
helped contribute to this situation," Wambach said.
"Overall, the economic outlook still remains relatively stable
at a fairly high level."
August's fall in German investor sentiment probably reflects the
euro's continued rise and recent falls in equity prices, Stephen
Brown, an economist at Capital Economics, said. But this not a sign
of an economic slowdown to come, the economist added.
Bundesbank on Monday said the biggest euro area economy is set
to continue its strong momentum in the current quarter.
The central bank said GDP growth in the current year could even
be somewhat stronger than the 1.9 percent projected in June.
The economic expectations index for the euro area decreased by
6.3 points to 29.3 in August. The decline of Eurozone growth
expectations was thus slightly lower than those for Germany.
By contrast, the indicator for the current economic situation of
the Eurozone climbed significantly by 9.7 points to 38.4 points in
August. The score reached its highest level since January 2008.
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