German economic sentiment unexpectedly deteriorated in August, hitting its lowest level since November last year, a sign that the economic upswing in Europe’s largest economy is losing momentum.
“A substantial improvement of the economic situation in Germany over the medium term is improbable,” Clemens Fuest, president of Germany’s ZEW think tank, said on Tuesday, but added that the economic upswing remains intact.
The ZEW said that its indicator of economic expectations fell for the fifth straight month, to 25.0 in August from 29.7 in July. Economists polled by The Wall Street Journal had forecast an increase to 32.0.
But the 228 analysts and institutional investors participating in August’s ZEW survey were slightly more satisfied with Germany’s current situation. The corresponding indicator rose to 65.7 from 63.9 the previous month.
The ZEW survey provides another peak into the third quarter, ahead of Friday’s publication of second-quarter gross domestic product data.
Economists, in a Wall Street Journal poll, are expecting an increase in the quarterly growth rate to 0.5% from 0.3% in the first quarter.