The euro zone debt crisis and concerns about a global slump sent investor confidence in Germany to a three-year low today, fuelling fears of recession in Europe's largest economy, analysts said.
The ZEW economic think-tank said in a statement that its closely watched economic expectations index fell by 5.7 points to stand at -43.3 points in September, its lowest level since December 2008.
The index had already plummeted by 22.5 points the previous month and it was the seventh month in a row that the indicator has fallen.
"The smouldering debt crisis in a number of euro zone countries and fears for a renewed weakening of the global economy are behind the drop," ZEW chief Wolfgang Franz said.
However, the decline was not so sharp as expected: analysts had pencilled in a reading of -45 points for September. Analysts said the decline "is another sign that the economy is suffering from slowing global demand growth and troubles in the euro zone's periphery."
The ZEW index is the only barometer of investor confidence in Germany and this month's reading was based on responses from 289 analysts. But it has not always proved particularly reliable in the past in forecasting accurately the magnitude of economic downturns or upturns.
Other business confidence indices, such as the purchasing managers' index or the all-important Ifo survey, which is based on as many as 7,000 responses in the real economy, are scheduled to be published later this month.
