Breaking: German ZEW index plunges to six year low amid trade war fears

The German ZEW business confidence index has again dropped sharply in April, amid growing investor concerns about the threat of a trade war with the US and the impact of Western military intervention in Syria.

The six month economic forecast, based on a survey among more than 200 analysts and institutional investors in Germany, fell by -13.3 basis points compared to the previous months and now hits negative territory at -8.2 basis points. The sharp fall in April follows a similar downward trend in March, when the outlook index fell by -12.7 basis points.

At the same time, investors’ assessment of the current situation in Germany is significantly less dramatic, with the index declining gradually from -1.6 basis points last month to -2.8 basis points in April, it is still at +87.9 basis points, highlighting a growing divergence among between cautious optimism about the current situation and growing fears of the future.

“The drop in business confidence is largely due to the trade war with the US as well as the current situation in Syria. Another factor is the clear decline in production, export and retail sales figures in the first quarter of 2018, which also had a detrimental effect on investors’ expectations” comments ZEW president Achim Wambach.

ABOUT THE AUTHOR
Mona Dohle
Mona Dohle speaks German and Dutch, she is DACH & Benelux Correspondent for InvestmentEurope. Prior to that, she worked as a journalist in Egypt and Palestine. She started her career as a journalist working for a local German newspaper. Mona graduated with an MSc in Development Studies from SOAS and has completed the CISI Certificate in International Wealth and Investment Management.

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