Germany's economic sentiment down in August, still in negative territory

By Aysu Bicer

ANKARA (AA) - Germany's economic sentiment index fell 1.5 points to minus 55.3, according to the Leibniz Centre for European Economic Research (ZEW) on Tuesday.

The assessment of the economic situation in Germany also diminished, standing at minus 47.6, which is 1.8 points lower than in the previous month.

"The ZEW Economic Expectations decrease again slightly in August after a sharp drop in the previous month. The financial market experts therefore expect a further decline in the already weak economic growth in Germany," said Dr. Michael Schroder, researcher at ZEW and head of the ZEW financial market survey.

"The still high inflation rates and the expected additional costs for heating and energy lead to a decrease in profit expectations for the private consumption sector. In contrast, the expectations for the financial sector are improving due to the supposed further increase in short-term interest rates," he added.

Financial market experts’ sentiment concerning the economic development of the eurozone fell 3.8 points to minus 54.9 in August.

Inflation expectations for the eurozone went up 2.1 points in the current survey. "With a value of minus 23.5 points, the indicator remains clearly in negative territory, indicating a reduction of the high inflation rates within the next six months," it said.