• Germany's news in English

Investor confidence hits 18-month low

AFP · 17 Jun 2014, 13:01

Published: 17 Jun 2014 13:01 GMT+02:00

Facebook Twitter Google+ reddit

The widely watched investor confidence index calculated by the ZEW economic institute fell by 3.3 points to 29.8 points in June. That was the lowest level since December 2012.

Analysts had been projecting a slight increase to around 35 points this month. "The indicator has decreased for the sixth time in a row," said ZEW president Clemens Füst.
"The recent decrease, however, was notably less significant than the May decrease, when the indicator lost more than ten points.
"The German economy is currently in a very good shape, but further increases are becoming more difficult," Füst said.
"We had a strong first quarter in 2014 due to favourable weather conditions, but signs are that the second quarter will be weaker," he said.
For the survey, ZEW questions analysts and institutional investors about their current assessment of the economic situation in Germany, as well as their expectations for the coming months.
Fears justified?
A frequent criticism of the ZEW index is that it can be volatile and is therefore not particularly reliable.
"There recently had been doubts and concerns about the strength of the German economy," said ING DiBa economist Carsten Brzeski.
"Slowing emerging market economies, the economic weakness of Germany's most important trading partner France and ongoing geopolitical conflicts close to Germany's backyard looked set to take their toll on the German economy," the expert said.
"However, fears of crash landing were overdone," even if the fundamental risks had clearly not disappeared, Brzeski said.
Capital Economics economist Jennifer McKeown said investors had been unimpressed by the European Central Bank's recent raft of monetary easing.
The ZEW reading "adds to signs that the German recovery is nearing a peak," she said.
"Admittedly, the continued rise in the current conditions index is an encouraging sign that the recovery has continued for now," McKeown noted.
Story continues below…
Furthermore, the headline index was still above its long-term average.
"But the recent fall in this index, together with the softer tone of the business surveys lately, suggests that the Germany recovery might not gain much pace from here," McKeown said.
Natixis economist Johannes Gareis similarly felt that "analysts don't really believe in a positive impact of the ECB stimulus on the German economy."
The renewed drop in the index "should also be seen against the background of still looming geopolitical risks," Gareis said.
"Indeed, as the crisis in Ukraine is dominating the news again since the start of this week and Russia cut off gas supplies to Ukraine yesterday, it won't be surprising to see an even lower ZEW headline index next month," he said.

For more news from Germany, join us on Facebook and Twitter.

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
Berlin Holocaust memorial could not be built now: creator
The Memorial to the Murdered Jews of Europe, in Berlin. Photo: DPA.

The architect of the Berlin Holocaust memorial has said that, if he tried to build the monument again today, it would not be possible due to rising xenophobia and anti-Semitism in Germany and the United States.

'Liberal' Germany stopping Europe's 'slide into barbarism'
Ian Kershaw. Photo: DPA

Europe is not slipping into the same dark tunnel of hate and nationalism that it did in the 1930s - mainly thanks to Germany - one of the continent's leading historians has said.

Eurowings strike to hit 40,000 passengers
Travelers impacted by the strike on Thursday wait at Cologne Bonn airport. Photo: DPA.

The day-long strike by a Eurowings cabin crew union is expected to impact some 40,000 passengers on Thursday as hundreds of flights have been cancelled.

Deutsche Bank reports surprise quarter billion profit
Photo: DPA

Troubled German lender Deutsche Bank reported Thursday a surprise €256-million profit in the third quarter, compared with a loss of more than six billion in the same period last year.

US 'warned Merkel' against Chinese takeover of tech firm
Aixtron HQ. Photo: DPA

The German government withdrew its approval for a Chinese firm to purchase Aixtron, which makes semiconductor equipment, after the US secret services raised security concerns, a German media report said Wednesday.

Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

Eurowings cabin crew union to strike all day Thursday
Photo: DPA.

UPDATE: A union representing cabin crews on Lufthansa's budget airline Eurowings has announced that strikes will last all day Thursday as ongoing contract negotiations continue to falter.

Hesse hopes to set example by building Iraqi orphanages
Refugee children in northern Iraq. Photo: DPA

The wealthy central German state of Hesse has set aside €1 million to build a school, family homes and an orphanage in northern Iraq, in an effort to help refugees there.

The Local List
10 German clichés that foreigners get very wrong
David Hasselhoff. Photo: DPA

Whether it be efficiency, humourlessness or a love of a certain Baywatch star, there are many cliches stuck in the heads of foreigners about Germany. But how true are they?

Fake Germanwings victim relative convicted in Cologne
A torn piece of metal at the crash site in 2015. Photo: DPA

A German court on Wednesday gave a woman a year's suspended jail sentence for posing as the cousin of a victim in last year's Germanwings plane crash and obtaining compensation offered by the airline.

10 German clichés that foreigners get very wrong
Sponsored Article
Last chance to vote absentee in the US elections
10 ways German completely messes up your English
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
jobs available
Toytown Germany
Germany's English-speaking crowd