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German investor mood at multi-year low on trade, Italy concerns

Reuters  |  BERLIN 

(Reuters) - The mood among German investors has sunk to its lowest in nearly six years, a survey showed, weighed down by a festering trade dispute with the and concerns about Italy's commitment to the zone.

The research institute's indicator fell to -16.1 in June from -8.2 in May, it said on Tuesday. That was its lowest level since September 2012 and missed a consensus forecast of -14.0 in a survey.

leaders and global economic institutions are warning that protectionist policies espoused by - including the imposition of punitive import tariffs on and aluminium - are casting a dark cloud over the

But as Europe's biggest exporter to the - a trade relationship that keeps more than one million Germans in employment - is desperate to avoid a trade war with

"The latest escalation in the trade dispute with the and fears about policies by the new that could destabilize the financial system are leaving their mark on the outlook for Germany," said in a statement.

Trump stunned U.S. allies at the weekend when he backed out of a joint communique agreed by leaders in that mentioned the need for "free, fair and mutually beneficial trade" and the importance of fighting protectionism.

The new government appointed this month in comprises anti-establishment parties that have promised to shake up the European Union, though its minister said at the weekend the country was committed to the single currency.

The survey was taken in the two weeks running up to Monday, which suggests most respondents sent their assessment at a time when concerns about were more prominent than those about trade.

"On the face of it, the ZEW index suggests that German growth will decelerate sharply and that recession is a significant risk," of wrote in a note.

"But note that its past relationship with GDP growth has been very weak and we would not draw any firm conclusions from a particular level."

A separate gauge measuring investors' assessment of the economy's current conditions dropped to 80.6 from 87.4 last month. The consensus forecast was for 85.0.

There was no discernable financial market reaction to Thursday's data.

(Reporting by Joseph Nasr; Editing by and John Stonestreet)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 12 2018. 16:43 IST
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