German investor sentiment falls once again
The mood among German investors darkened in October, a survey showed today, as concerns over the direction of Europe’s biggest economy continue to mount.
Think tank ZEW’s economic sentiment indicator fell to minus 22.8 points in October from minus 22.5 in September. This was a smaller fall than economists had predicted, but highlights expectations of stagnation in Germany.
ZEW president Achim Wambach said: “The recent settlement in the trade dispute between the USA and China does not seem to diminish economic scepticism at this stage.”
China over the weekend reached a tentative deal with the US which would see it buy more agricultural product. Nonetheless, the trade war that has damaged global demand and growth is far from over.
The German economy has felt the full effects of the tariff war-induced slowdown. Its economy shrank in the second quarter as is its exports tumbled.
Investors’ views of Germany’s current economic situation in October was as low as it was during the Eurozone crisis in 2010, ZEW said.
Chancellor Angela Merkel has faced sustained calls, including today from the International Monetary Fund (IMF) to loosen the state’s purse strings and boost demand by spending on things such as investment.
Yet German politicians have long been wedded to the so-called black zero policy of a balanced budget and have resisted calls to loosen fiscal policy except in the event of a severe downturn.
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