German investor confidence slumped in August for the sixth month in a row to levels last seen in late 2008 on worries about the euro zone debt crisis and weak prospects for economic growth, the ZEW indicator showed today.
The closely watched ZEW economic expectations index fell a whopping 22.5 points to stand at -37.6 points, far below the indicator's historical average of 26.2 points. In July, it had slipped by just 6.1 points.
The drop to a level last seen in December 2008 was worse than expected, as economists had predicted on average a fall to -26 points.
'The fear of a recession in the US together with the downgrade of the credit-rating of the US has further increased macroeconomic uncertainty,' a ZEW statement said.
'Due to increased macroeconomic uncertainty, the critical development in the euro zone and the disappointing data on German GDP (gross domestic product) growth in the second quarter of 2011, financial market experts are far more sceptical now with respect to future economic growth,' it added.
'This scepticism has increased dramatically' in recent months, the statement quoted ZEW president Wolfgang Franz as saying. 'Expectations are in line with the pessimism about economic growth prevailing on stock markets,' he added.
The survey's current conditions index also fell sharply to 53.5 points from July's 90.6 points, although it remained in positive territory above 50 points.
The indicator compiled by the Centre for European Economic Research (ZEW) was based on surveys of 286 analysts and institutional investors, it said.
