Investor confidence in Germany has been waning for three straight months amid weak economic data, the ZEW institute has reported Read Full Article at RT.com
Investor confidence in the EU’s largest economy is falling, economists warn
Investor confidence in Germany has fallen for a third consecutive month as growth prospects worsen, fueling fears of a recession in the EU’s largest economy, Bloomberg reported on Tuesday.
The economic sentiment index measured by the ZEW economic research institute dropped to -10.7 in May from 4.1 in April, representing the first sub-zero reading this year. An index of current conditions also deteriorated, the outlet said.
The data comes amid a deeper-than-expected production slump across most industries in Germany. New orders for manufacturing companies dropped 10.7 % month-on-month in March, the sharpest decline since April 2020.
“The financial market experts anticipate a worsening of the already unfavorable economic situation in the next six months,” ZEW President Achim Wambach said in a statement. “As a result, the German economy could slip into a recession, albeit a mild one,” he added.
Economists are predicting that German industry will remain at a stand-still instead of the hoped-for recovery, dampening prospects of an economic resurgence.
“Today's ZEW sends a worrisome message,” Carsten Brzeski, global head of macro at ING, said in a report to clients. “Three consecutive drops are a new trend, a trend in the wrong direction.”
Tighter financial conditions and the shocks of soaring energy prices have begun to weigh on Berlin’s near-term growth, the International Monetary Fund (IMF) warned in its country report on Tuesday.
Germany’s GDP is expected “to stay near zero in 2023, before gradually strengthening to 1%-2% during 2024-26 as the lagged effects of monetary tightening gradually dissipate and the economy adjusts to the energy shock,” according to the IMF.
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