German investor confidence sinks

May 14, 2014 - 4:51:20 am

FRANKFURT: Investment sentiment in Germany fell to the lowest level for nearly 1.5 years in May amid concern that growth in Europe’s top economy is set to lose momentum, a survey found yesterday.

The widely watched investor confidence index calculated by the ZEW economic institute fell by 10.1 points to 33.1 points in May, it said in a statement. 

It was the fifth monthly decline running in the index, bringing it to its lowest level since January 2013.

Analysts had been projecting a much softer drop to 41 points. 

“Already, there are indications that Germany will not be able to maintain this fast pace of growth,” said ZEW president Clemens Fuest. 

“Nevertheless, one can assume a positive underlying trend for the economic development for the year 2014. The decline of the experts’ economic expectations for Germany should be seen against the backdrop of a strong economic development in the first quarter,” Fuest said. 

Official first-quarter growth data are scheduled for release later this week. However, analysts are pencilling in an acceleration in gross domestic product (GDP) growth to 0.7 percent in the period from January to March. In the preceding three months, the German had grown by 0.4 percent.

Nevertheless, analysts believe the first-quarter growth figures will have been boosted by the 

unusually mild winter, which favours key industries such as construction.AFP