German investor confidence falls despite growth upgrade

Investor confidence for the German economic outlook unexpectedly declined, despite improved GDP growth forecasts, the monthly ZEW survey revealed.

While German GDP increased by 0.7% over the last quarter, investors have turned more pessimistic on the outlook for the Eurozone, which dropped by -4.7 bsp to 16.8 bsp and Germany in particular, with the German six month outlook declining by -6.8 to 6.4 bsp.

According to German Federal Statistical Office Destatis, improved growth figures coincided with a growing workforce, the number of people in employment increased by 1.3% while  labour productivity grew by 1.1% compared to the previous year.

The growing caution among German investors is partly driven by international factors, according to Christian Libs, analyst at Nord LB: “Both the prospect of a Fed rate hike and the Brexit risk have clearly reduced expectations for an improved macroeconomic environment, however, this should not be overstated” he argues.

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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