The Investor Confidence Index for the German economy published by the Center for European Economic Research (ZEW) renewed its six-month high in October and amounted to minus 1.1 points, following minus 11.4 points in September (index values above zero indicate investors’ optimism, while values below zero suggest pessimism). Analysts had projected the index to be minus 9.3 points.
Another index which shows the current economic situation in the Federal Republic of Germany (also calculated by ZEW) fell to minus 79.9 points in October (this is the lowest it has been since August 2020), following minus 79.4 points in September. We would like to note that this indicator depends less on the expectations and more on the indicators published by the Federal Statistical Office of Germany (Destatis).
The retail sales indicator fell even further into decline in August, 1.2% down month-over-month (a record drop since December 2022) and 2.2% year-over-year.
In August, the volume of industrial production in Germany also continued to decline: it fell by 0.2% month-over-month and by 1.97% year-over-year.
The German authorities recognize the problem of weak industrial indicators: they influenced the fact that in autumn the German government revised the forecast of the country’s GDP dynamics. In spring, the euro zone’s largest economy was expected to grow by 0.4% this year and 1.6% next year. Now, however, it is expected that the GDP will decrease by 0.4% in 2023 and grow by 1.3% in 2024.