A survey shows investor confidence in Germany, Europe’s biggest economy, has fallen for the seventh consecutive month as concern about the fallout from the Volkswagen scandal adds to worries about weak growth in emerging economies, Associated Press reported.
The Center for European Economic Research, known by its German acronym ZEW, said Tuesday that its monthly index dropped to 1.9 points for October from 12.1 last month. That’s below the long-term average of 24.8 points and off a peak in March of 54.8.
ZEW chief Clemens Fuest said that, while the VW emissions-rigging scandal and emerging market weakness have dampened the economic outlook, “the performance of the domestic economy is still good and the euro area economy continues to recover,” making a recession unlikely.
Cutting Growth Estimate
The German government will trim its estimate for growth this year to 1.7% but it is sticking with a forecast for growth of 1.8% next year, a senior government official told Reuters on Tuesday.
Economy Minister Sigmar Gabriel is expected to announce the updated forecasts on Wednesday. Previously, the government had been projecting growth of 1.8% this year, but a slowdown in China and other emerging markets has weighed on recent industrial orders, output and export data.
