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Cautious German investors

August 12, 2014

A leading German economic think tank has found investors' confidence in the national economy has dropped to levels not seen in two years. It cited geopolitical uncertainties and domestic growth worries.

https://p.dw.com/p/1Cst4
German workers assembling steam turbines
Image: picture-alliance/dpa

Investment sentiment in Germany fell to its lowest level since in almost two years in August, the Center for European Economic Research (ZEW) said Tuesday in its latest monthly report on confidence among analysts and investors with regard to future developments in Europe's largest economy.

The think tank said its benchmark index dropped by 18.5 points to 8.6 points this month, reaching its lowest level since December 2012.

ZEW researchers said that "continued geopolitical tensions are having a tangible impact on the German economy."

Growth worries

ZEW cited the Ukraine conflict and the explosive situation in the Middle East, saying they had contributed to German economic players being increasingly insecure about investment decisions.

Economists fear that German growth may have stagnated between April and June, with the National Statistics Office due to come up with a first GDP estimate on August 14.

In the first quarter of the year, the economy expanded by 0.8 percent, mainly due to a very mild winter.

hg/nz (Reuters, AFP)