Investor confidence in Germany fell suddenly and unexpectedly this month on fears that continued growth will slow down over the next six months, a survey conducted by the ZEW Institute showed Tuesday.
The ZEW Institute said in a statement that its monthly confidence index dropped 4.2 points to minus 15.7 points in November from October’s level of minus 11.5.
The previous two months had seen confidence in Europe’s largest economy increasingly steadily, albeit gradually, leading many economists to expect a third month of an incremental growth, The Associated Press reports.
A negative figure means that the investors surveyed are still pessimistic about Germany’s economic outlook for the next six months.
"Since mid-2012 the economic expectations of the financial market experts move more or less sideways while remaining in the negative territory,” ZEW President Wolfgang Franz said in a statement.
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ZEW attributed November’s decline to recent disappointing leading indicators such as weakening industrial orders that might stymie the already struggling manufacturing sector.
This month’s drop still keeps the German index below the historical average of plus 23.3 points.
Germany is set to release official figures on Thursday that are expected to show modest economist growth throughout the third quarter. Many economists and analysts anticipate that growth will continue to weaken throughout the winter as the Eurozone crisis deepens.
Germany enjoyed strong growth the past two years, but the continued financial crisis hitting several major European countries that has pushed several European countries into recession is now hitting confidence as well as exports in the stalwart of the Eurozone.
"Prevailing recessionary developments in the eurozone impact the German economy via foreign trade and a lack of confidence," Franz said.
"This is likely to be a burden for economic growth in Germany during the next six months."