Wall Street Journal: A dark autumn awaits the German economy
Germany’s economic outlook fell sharply in September, adding to ongoing weakness in Europe’s largest economy.
The Wall Street Journal, reported that according to the ZEW Economic Sentiment Index, which tracks analysts’ expectations for the economy over the next six months, fell 15.6 points to 3.6 points from August, well below expectations of 15.5 points.
The index has been in positive territory since November 2023, but the latest figures show that analysts are as optimistic as pessimistic about the German economy.
According to the report, hope for a rapid improvement in the economic situation is clearly fading, as Achim Wambach, president of the German Institute for Economic Research (ZEW) said.
The index of the current state of the German economy has also fallen to levels close to those seen at the start of the coronavirus pandemic in spring 2020, according to Robin Winkler, chief economist at Deutsche Bank.
The index fell to minus 84.5 points from minus 77.3 points, its lowest level since May 2020.
The German economy unexpectedly contracted in the second quarter of this year, with little growth expected for the rest of 2024.
This comes amid a continued decline in the country’s main industrial sector.
Survey data for August showed a deterioration in business sentiment in the manufacturing sector, with consumer confidence continuing to decline.
“The optimism we saw in the spring has disappeared, and a gloomy autumn appears to be on the horizon,” Winkler noted.
The index survey also showed a decline in economic expectations for the Eurozone as a whole, although the decline was greater in Germany.
The financial market experts’ assessment of the economic development in the Eurozone declined during the current month, recording an index of 9.3 points, compared to 17.9 points last August.
The eurozone economic situation assessment index also fell by 8 points to -40.4 points.
This comes despite the fact that survey participants took into account the decisions of the European Central Bank, which cut the deposit rate for the first time since 2019 last June, and then cut it again to 3.5% at its meeting last week.
