Investor confidence in Germany drops
German investor confidence has taken an unexpected dive, giving another indication that the euro zone crisis is making itself felt in the EU’s largest economy.
The closely watched Zew index dropped 4.2 points in November – the first drop since August – to stand at –15.7, down from –11.5 the previous month. The index had been expected to move in the other direction.
“Prevailing recessionary developments in the euro zone have impacted the German economy via foreign trade and a lack of confidence,” said Prof Wolfgang Franz, president of Mannheim’s Zew economic institute. “This is likely to be a burden for economic growth in Germany during the next six months.”
The Zew data, based on a survey of financial market professionals, is considered less reliable than the Ifo business confidence survey. But even that index has been similarly downbeat of late, falling for six consecutive months.