German investor morale declines sharply in August – ZEW

The report from German ZEW economic research institute released on Tuesday, showed that country’s investor morale slumped in August.

ZEW economic sentiment index fell to 19.2 points in August from 41.8 points in July and strongly undershot 32.0 consensus

Commenting the latest data, ZEW president Achim Wambach said that the economic outlook for Germany is breaking down, as economic expectations in EU’s largest economy are still affected by a high level of uncertainty, driven by unclear monetary policy, disappointing business data from the US economy and growing concern about an escalation of the conflict in the Middle East.

Negative numbers and threatening geopolitical situation continue weaken expectations for recovery of the economy which was traditionally a driver of EU bloc’s economic growth, as Germany was the only one from major economies to register contraction in 2023, hit strongly by high inflation and significant slowdown in industrial sector.

The outlook remains dark after a series of weak economic data with German government being cautiously optimistic and expecting slight economic growth in 2024, though weighed by deteriorating economic conditions.