FRANKFURT: Confidence within Europe's economic powerhouse took a severe battering in August as Germany's consumers and businesses delivered a gloomy forecast for future prospects.
The latest results from the Ifo economics institute's Business Climate Index for August shows a fall to 94.8.from 97.5 the previous month; while a consumer survey by market researcher GfK revealed confidence has dipped to a five-year low.
Meantime, the German government confirmed the economy contracted 0.5% in the second quarter, the result of weak household spending and cutbacks in construction.
A recession, albeit a technical one, is now clearly on the horizon and, warns ING Bank economist Carsten Brzeski: "The German economy is further descending into a maelstrom of economic troubles."
In addition, the slide in consumer confidence bodes ill for retailers, whose hopes for a robust holiday season are hanging by a thread.
Said Herbert Kaempfer, a spokesman for a retailers' association: "High oil and gas prices are massively sucking off purchasing power that is flowing out of the economy."
The latest results from the Ifo economics institute's Business Climate Index for August shows a fall to 94.8.from 97.5 the previous month; while a consumer survey by market researcher GfK revealed confidence has dipped to a five-year low.
Meantime, the German government confirmed the economy contracted 0.5% in the second quarter, the result of weak household spending and cutbacks in construction.
A recession, albeit a technical one, is now clearly on the horizon and, warns ING Bank economist Carsten Brzeski: "The German economy is further descending into a maelstrom of economic troubles."
In addition, the slide in consumer confidence bodes ill for retailers, whose hopes for a robust holiday season are hanging by a thread.
Said Herbert Kaempfer, a spokesman for a retailers' association: "High oil and gas prices are massively sucking off purchasing power that is flowing out of the economy."
Data sourced from Wall Street Journal Online; additional content by WARC staff
