Tags: EU | Germany | Economy

German Investor Confidence at 2 1/2-Year Low

Tuesday, 21 Jun 2011 10:39 AM

Greece's debt crisis and the faltering U.S. economy combined to send German investor confidence down to a 2½-year low, a closely-watched survey found Tuesday.

The ZEW institute said its main index, which measures investors' economic outlook for the next six months, tumbled to minus 9 points for June from 3.1 in May.

June's decline was the fourth in a row and takes the index down to its lowest level since January 2009, when it stood at minus 31.

Though Germany's resurgent economy has managed to withstand the debt troubles being experienced elsewhere in the 17-nation eurozone, fears of a possible Greek default have loomed large in recent weeks.

"Troubles in the eurozone as well as the feared economic downturn in the U.S. seem to weigh heavily on the mind of the financial market experts," ZEW head Wolfgang Franz said.

As a result, Franz said these experts think the German economic recovery will weaken in the months to come.

The German economy grew by 3.6 percent last year, thanks to strong exports and improving domestic demand. It kept up the momentum in this year's first quarter, with growth of 1.5 percent.

This year's official government growth forecast is for 2.6 percent, though Finance Minister Wolfgang Schaeuble said last week the figure may top 3 percent. Improving tax receipts have revived talk in the governing coalition of tax cuts.

Still, officials and economists don't see the economy keeping up that pace in the long term.

The latest ZEW survey saw investors' assessment of Germany's current economic situation dip for the first time in two years to 87.6 points from 91.5.

ING economist Carsten Brzeski said the survey echoed findings elsewhere, that the German economy cannot insulate itself from the global economic slowdown.

"However, with strong fundamentals, a high backlog of orders as a safety net for production and a pick-up in private consumption, the soft patch in Germany should be short-lived and rather mild," Brzeski said.

The Center for European Economic Research, or ZEW, surveyed 290 analysts between May 30 and Monday.

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Greece's debt crisis and the faltering U.S. economy combined to send German investor confidence down to a 2½-year low, a closely-watched survey found Tuesday.The ZEW institute said its main index, which measures investors' economic outlook for the next six months,...
EU,Germany,Economy
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2011-39-21
Tuesday, 21 Jun 2011 10:39 AM
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