German investor sentiment lowest in 6 years | Business| Economy and finance news from a German perspective | DW | 10.07.2018
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German investor sentiment lowest in 6 years

The mood among German institutional investors has worsened sharply in recent weeks, a fresh monthly survey shows. For an export-oriented country like Germany, there's a lot to worry about, experts say.

Confidence among investors in Europe's powerhouse plunged sharply in July, the ZEW economic think tank announced Tuesday.

It said its monthly barometer dropped to levels not seen since August 2012 amid signs that current trade frictions could spiral out of control.

"Above all, fears of an escalation in the international trade conflict with the United States drove the institute's index down 8.6 points to reach -24.7 points," ZEW President Achim Wambach said in a statement.

US President Donald Trump had hit steel and aluminum imports with higher tariffs and threatened to do the same to EU cars, after the European Union retaliated with border taxes of its own on US goods.

Trump's multifront fight

Major German firms are already suffering from the White House's trade spat with Beijing, the main front in Trump's battle to slash US deficits. German cars built in the US are facing new tariffs when entering China.

Investors' views of the current situation in both Germany and the eurozone as a whole worsened, suggesting that recent positive indicators for the 19-member bloc related to industrial production and employment are more than canceled out by the expected negative effects on exports from the trade conflict.

Some analysts believe Germany has reached the end of its economic upswing following the global financial crisis. Leading economic institutes in the country have already lowered their growth forecasts, now predicting the German economy to expand by little under 2 percent this year.

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