- Andreas Scheuerle, an economist at Dekabank
The broadly anticipated indicator of economic mood in Europe's largest economy disappointed market participants on Wednesday, stirring further concerns surrounding the Eurozone, which is struggling to grow. The ZEW Center for European Research said its gauge of investor and analyst expectations, which was designed to predict economic developments over the next six months, tumbled to 36.3 in July, down from 38.5 in the preceding month, while the majority of economists expected a jump to 40. Despite weak reading, the index remains rather stable during the last 4 months, suggesting the situation in Europe's powerhouse will not deteriorate further. In addition to that, a measure of current situation slid to 10.6 points in the month, from 8.6 points a month earlier.
The nation's industrial output, factory orders as well as exports all slid in May. Even despite a slight improvement in the labour market and Ifo business confidence, the European Central Bank says that risk to the economic outlook in the Eurozone, which is Germany's biggest trading partner, remain on the downside. Hence German GDP expanded 0.1% in the first quarter, recovering from a 0.7% contraction in the last quarter of 2012, adding to concerns that possibility for another quarter of negative growth is high.
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