German Economic Sentiment Weakens To 18-Month Low
March 20 2018 - 4:31AM
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Germany's economic confidence deteriorated sharply to a
one-and-a-half-year low in March on fears of US led trade
conflicts, survey data from the Mannheim-based think tank ZEW
showed Tuesday.
The ZEW Indicator of Economic Sentiment dropped
more-than-expected to 5.1 in March from 17.8 in February. This was
the lowest score since September 2016 and well below the expected
level of 13.0.
The current conditions index came in at 90.7 in March versus
92.3 in the previous month. The reading was seen easing moderately
to 90.
Strong current assessment and weak expectations are a good
reminder that strong German growth should not be taken for granted,
Carsten Brzeski, an ING economist, noted.
"Concerns over a US-led global trade conflict have made the
experts more cautious in their prognoses," ZEW President Achim
Wambach said.
Further, he said the strong euro is also hampering the economic
outlook for Germany, a nation reliant on exports.
"Combined with the experts' continued positive assessment of the
current situation, however, the outlook is still largely positive,"
Wambach added.
March's sharp decline in the ZEW measure of German investor
sentiment highlights the risks to the economy, Stephen Brown, an
economist at Capital Economics, said. While Germany would be hit
harder than most by a trade war, for now the outlook is
positive.
The survey showed that the economic confidence index for the
euro area declined significantly by 15.9 to 13.4 points in March.
At the same time, the current conditions index slid moderately by
1.5 points to 56.2 in March.
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