German economic confidence weakened for the sixth consecutive month in September to its lowest level in 10 months, survey data from the Mannheim-based Centre for European Economic Research or ZEW showed Tuesday.
The investor confidence index dropped to 12.1 points in September from 25 in August. The latest reading was the lowest since November 2014, when it was 11.5, and was below the expected score of 18.3.
“The weakening economic development in emerging markets dampens the economic outlook for Germany’s export-oriented economy,” ZEW President Clemens Fuest said.
“While economic growth in the second quarter was largely driven by external demand, it is becoming less likely that exports will stimulate growth in the near future,” Fuest added.
The assessment of the current situation rose marginally to 67.5 in September from 65.7 a month ago, while it was expected to fall to 64.
The survey provides some reassurance that recent market turmoil has not yet hit the euro-zone’s main growth engine, Jonathan Loynes at Capital Economics, said.
But there is no room for complacency and further falls in sentiment over the coming months are likely to raise the pressure on the European Central Bank to up its policy support in order to protect the region’s fragile recovery, the economist noted.
Carsten Brzeski, an ING-DiBa economist said, low commodity prices and the weak euro are still the best doping for the German economy. With the prospects of a first Fed hike and possibly more ECB quantitative easing, the German economy’s life on steroids will not end any time soon, he added.
Financial market experts’ sentiment concerning the economic development of the Eurozone has weakened, the survey revealed. The indicator of economic sentiment for the euro area decreased by 14.3 points to 33.3 in September.
At the same time, the current situation indicator gained 0.6 points to minus 9.7 points.
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