Investor Confidence In Germany's Economy Fell Sharply Again

Investor Confidence In Germany's Economy Fell Sharply Again

Investor confidence in Germany's economy fell sharply again in November, more than economists had estimated, after reaching a 20-year high in September. The reason was the tightening of restrictions in the largest European economy in order to suppress the second wave of the new coronavirus pandemic. A survey by the Center for Research on the European Economy (ZEW) on Tuesday revealed that sentiment had worsened across the eurozone. According to the latest ZEW results, the key index of German investor confidence, which expresses their expectations for the next six months, fell by 17.1 points in November 2020 to 39 points from 56.10 points in October. At the same time, economists estimated that it would fall to 41.7 points. To illustrate, in September, the value of the index climbed to 77.4 points. In November, compared to September, its value decreased by as much as 38.4 points. "Financial experts are concerned about the economic consequences of the second wave of COVID-19," said ZEW chief Achim Wambach. According to him, another significant decline in the index in November indicates a slowdown in the economic recovery in Germany. There are also fears that the German economy could fall back into recession. Experts also said that the Brexit talks and the outcome of the US presidential election did not affect investors' expectations in the November survey. However, the assessment of the current economic situation in Germany fell by 4.8 points to -64.3 points. The government in Berlin estimates that the performance of the German economy will fall by 5.5% in 2020 due to a pandemic. In the case of the euro area, the November ZEW confidence index fell by 19.5 points month-on-month to 32.8 points, which is its closest value since April. The current economic situation rose by 0.2 points to -76.4 points, while inflation expectations fell by 4.7 points to 22.6 points.