MANNHEIM, Germany--Economic expectations in Germany fell well below consensus forecasts in November, the latest sign that the euro zone's largest economy is likely to deteriorate over the next six months as the currency bloc's debt crisis drags on, data showed Tuesday.
The Center for European Economic Research, also known as ZEW, said its closely watched economic index fell to -15.7 in November from -11.5 in October. Experts polled by Dow Jones Newswires had forecast an increase to -10.
The decline in the ZEW index dashes hopes that the German economy will escape the broader slowdown in the euro zone, and adds weight to the possibility that it could contract in the fourth quarter.
"It's a sign that Germany cannot be decoupled from the recessions around it," ZEW Economist Marcus Kappler said, referring to Spain and Italy.
Mr. Kappler added that Germany falling into recession was unlikely, but the risk persists. After four consecutive monthly declines to the economic outlook in Germany, the index rose in September and again in October, after the European Central Bank pledged to buy potentially unlimited amounts of government debt to help struggling euro-zone member countries.
However, since then a series of disappointing data have pointed to the challenges still facing Germany.
On Friday, the German economics ministry confirmed the country's economy is to weaken "noticeably" during the winter months.
The ministry cited hesitant companies holding back on investments amid the debt crisis. Last week, ECB President Mario Draghi warned that the negative effects of the crisis were impacting the German economy, once seen as immune to the troubles plaguing peripheral countries.
"Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area. But the latest data suggest that these developments are now starting to affect the German economy, the euro zone's top central banker said in a speech Wednesday.
ZEW attributed its negative assessment partly to disappointing leading indicators, including the 3.3% drop in manufacturing orders and a 1.8% drop in industrial output in September from August.
German exports also fell 2.5% in September from August, as orders from the European Union, and in particular the euro zone, dried up.
"Prevailing recessionary developments in the euro zone impact the Germany economy.. This is likely to be a burden for economic growth in Germany," ZEW President Wolfgang Franz said in a statement.
ZEW's current conditions index decreased to 5.4 in November from October's 10.0, versus the consensus forecast of 8.0 for November.
nasdaq.com
The Center for European Economic Research, also known as ZEW, said its closely watched economic index fell to -15.7 in November from -11.5 in October. Experts polled by Dow Jones Newswires had forecast an increase to -10.
The decline in the ZEW index dashes hopes that the German economy will escape the broader slowdown in the euro zone, and adds weight to the possibility that it could contract in the fourth quarter.
"It's a sign that Germany cannot be decoupled from the recessions around it," ZEW Economist Marcus Kappler said, referring to Spain and Italy.
Mr. Kappler added that Germany falling into recession was unlikely, but the risk persists. After four consecutive monthly declines to the economic outlook in Germany, the index rose in September and again in October, after the European Central Bank pledged to buy potentially unlimited amounts of government debt to help struggling euro-zone member countries.
However, since then a series of disappointing data have pointed to the challenges still facing Germany.
On Friday, the German economics ministry confirmed the country's economy is to weaken "noticeably" during the winter months.
The ministry cited hesitant companies holding back on investments amid the debt crisis. Last week, ECB President Mario Draghi warned that the negative effects of the crisis were impacting the German economy, once seen as immune to the troubles plaguing peripheral countries.
"Germany has so far been largely insulated from some of the difficulties elsewhere in the euro area. But the latest data suggest that these developments are now starting to affect the German economy, the euro zone's top central banker said in a speech Wednesday.
ZEW attributed its negative assessment partly to disappointing leading indicators, including the 3.3% drop in manufacturing orders and a 1.8% drop in industrial output in September from August.
German exports also fell 2.5% in September from August, as orders from the European Union, and in particular the euro zone, dried up.
"Prevailing recessionary developments in the euro zone impact the Germany economy.. This is likely to be a burden for economic growth in Germany," ZEW President Wolfgang Franz said in a statement.
ZEW's current conditions index decreased to 5.4 in November from October's 10.0, versus the consensus forecast of 8.0 for November.
nasdaq.com
No comments:
Post a Comment