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GERMANY-ECONOMY-INVESTMENTS
German investor confidence at lowest level since 2011
BERLIN, March 17, 2020 (BSS/AFP) – Investor confidence in Germany has plummeted to its lowest level since 2011 over the coronavirus crisis, a closely-watched survey said on Tuesday.
The ZEW institute’s monthly indicator brings together the sentiments of around 350 economists and analysts to provide a picture of the economic outlook over the next six months.
The overall economic sentiment indicator fell by 58.2 points in March to -49.5 points, the largest drop since the survey was set up in 1991.
The reading was also worse than predictions of Factset analysts, who had feared a 33-point drop.
“The economy is on red alert,” ZEW chief Achim Wambach said in a statement.
The spread of the coronavirus in recent weeks has led European governments to take increasingly drastic measures, bringing many sectors of the economy to a standstill.
“Economic expectations are in free fall,” said Jens-Oliver Niklasch, an analyst for the LBBW bank, pointing out that there had been more “bad news” since the survey period ended.
“In our view, the German economy is likely to experience a recession in the first half of the year, in terms of the plain GDP data probably getting close to numbers seen during the financial crisis,” said ING Diba bank analyst Carsten Brzeski.
The German economy is likely to shrink by “more than 1.5 percent” year-on-year in 2020, according to ING, following modest growth of 0.6 percent in 2019.
In a sign of the current market volatility, Germany’s flagship DAX index has lost more than a third of its value since the beginning of the year.
BSS/AFP/MMA/1915HRS