The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months ahead, slid to 29.7 from 31.5 in June.
While that’s the lowest level since November, it beat the median estimate of 29 in a Bloomberg survey. A measure of current conditions rose. Business confidence has been weakening in Germany, Europe’s largest economy, even though the Bundesbank predicts a strengthening expansion.
Sentiment worsened as Greece veered close to exiting the euro area, with unforeseeable consequences for the rest of the currency bloc, before a last-minute bailout deal was agreed by political leaders on Monday.
“The macroeconomic picture for the German economy does not look bad at all,” said Carsten Brzeski, chief economist at ING DiBa AG in Frankfurt. “German investors have taken the stance that the Greek crisis or even a Grexit would not harm the German economy.”
A gauge of current conditions in Germany climbed to 63.9 in July from 62.9 the previous month, ZEW said. A measure of expectations for the euro area slid to 42.7 from 53.7. The survey ran from June 29 to July 13. Germany’s DAX Index of stocks was down 0.5 percent at 11:35 a.m. Frankfurt time.
The euro was 0.2 percent higher at $1.102. The Bundesbank boosted its German growth outlook on June 5, forecasting an expansion of 1.7 percent in 2015 compared with the 1 percent it predicted in December.
Unemployment is at a record-low 6.4 percent, supporting the consumer spending that has driven the country’s recovery.
bloomberg.com
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