German economic confidence deteriorated more-than-expected to a ten-month low in August, survey data from the ZEW – Leibniz Centre for European Economic Research showed Tuesday.
The ZEW Indicator of Economic Sentiment for Germany fell to 40.4 from 63.3 in July. The score was forecast to drop moderately to 56.7.
With the third consecutive drop in index, the reading reached its lowest since November 2020.
Meanwhile, the assessment of the economic situation advanced 7.4 points to 29.3 points in August. But this was slightly below the economists’ forecast of 30.0.
The third straight fall in expectations points to increasing risks for the German economy, such as from a possible fourth COVID-19 wave starting in autumn or a slowdown in growth in China, ZEW President Achim Wambach, said.
“The clear improvement in the assessment of the economic situation, which has been ongoing for months, shows that expectations are also weakening due to the higher growth already achieved,” Wambach added.
The financial market experts’ sentiment concerning the economic development of the euro area also weakened for the third consecutive time. The corresponding index decreased 18.5 points to 42.7 points in August.
By contrast, the indicator for the current economic situation climbed 8.6 to 14.6 points in August.
Further, the survey showed that inflation expectations for the Eurozone fell by 27.4 points in parallel with the decline in economic expectations. The inflation indicator currently stands at 42.2 points.