German investor sentiment deteriorated slightly in August, according to a survey released on Tuesday by the ZEW Center for European Economic Research in Mannheim.
The headline ZEW investor expectations index fell to -55.3 from -53.8 in July, hitting its worst level since October 2008.
Meanwhile, the current situation index declined to -47.6 in August from -45.8 the month before.
Dr. Michael Schröder, researcher at ZEW and head of the ZEW financial market survey, said: “The ZEW economic expectations decreased again slightly in August after a sharp drop in the previous month. The financial market experts therefore expect a further decline in the already weak economic growth in Germany.
“The still high inflation rates and the expected additional costs for heating and energy lead to a decrease in profit expectations for the private consumption sector. In contrast, the expectations for the financial sector are improving due to the supposed further increase in short-term interest rates.”
Andrew Kenningham, chief Europe economist at Capital Economics, said: “The ZEW survey fell again in August and is at a level consistent with the economy contracting. We now think a recession is unavoidable in the second half of this year as the impact of high energy prices on both households and industry takes effect.”
