German Economic Confidence Slumps

21 September 2006

MANNHEIM: Germany's economic resurgence could be past its peak, according to business confidence figures from the nation's ZEW index.

Concern among investors that a predicted slowdown in the US could damage Germany's huge export sector helped to drive down the ZEW index to minus 22.2 for September, from minus 5.6 last month. It was the lowest level since January 1999.

Analysts were caught out by the weakness. In a poll last week, even the most negative economist forecast a reading of no lower than minus 19.

Comments ZEW president Wolfgang Franz: "The positive business climate is at risk. The German government should not ignore these alarm signals and should redress the serious imbalances in its economic policy."

Data sourced from The Times Online (UK); additional content by WARC staff