German investor sentiment hits its lowest in eight months
Germany’s Investor sentiment has fallen to its lowest level in eight months, though the country’s economic outlook remains positive, a new survey says.
According to the study, whose results were released on Tuesday, the investor confidence index for Germany as calculated by the Center for European Economic Research (ZEW) institute, dropped by just 1.8 points to 29.7 points in July, hitting its lowest level since November 2014, ZEW said in a statement.
The change was, though, less remarkable than what analysts had been expecting as they had projected a slightly steeper decline this month to 29.0 points, AFP reported.
"Neither the difficulties in dealing with the Greek sovereign debt crisis nor the turmoil on Chinese financial markets seem to impress the financial market experts strongly," said ZEW President Clemens Fuest, who added, "Despite the slight decline of the indicator, the overall economic outlook for Germany remains positive."
To conduct the survey, ZEW questioned analysts and institutional investors about their assessment of Germany’s economic situation, and their expectations for the coming months.
Analysts maintain that the impact of the Greek debt crisis on the German economy has not been as damaging as some analysts might have feared.
"It seems as if German investors have taken the stance that the Greek crisis or even a 'Grexit' would not harm the German economy and therefore rather focused on the positive impact from the still weak euro exchange rate and the latest drop in energy prices," said ING DiBa economist, Carsten Brzeski.
"Indeed, the macro-economic picture for the German economy does not look bad at all," the analyst noted, adding, "Whether it is naivety, indifference or just matter-of-factness remains to be seen. For the time being, however, investors' trust in the German economy is almost impossible to be upset."
However, Capital Economics economist, Jennifer McKeown, was more cautious in this regard, saying, "Admittedly, the decline was not as sharp as we or the consensus had feared and the fact that the index remains firmly positive means that most investors expect conditions to improve."
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