- Ifo institute, DIW, IW and RWI
Many analysts expressed their concerns that the ongoing recovery in the 17-nation bloc is fragile and is not sustainable yet. Following these comments, report from the ECB showed current account surplus widened less than expected in August, while German leading economic think tanks downgraded their growth forecasts. The difference in value between imported and exported goods, services, income flows, and unilateral transfers stood at 17.4 billion euros from July, when it reached 15.5 billion. Even though the level is significantly higher than a month earlier, it still falls short of analysts' expectations of a 17.7 billion level. Meanwhile, the current account data is vital for the long-term confidence of investors. Another worrying sing for Europe came from its powerhouse, Germany, where four leading institutes updated their growth forecasts, saying German GDP would expand just 0.4% this year and on the back of strong domestic demand it would accelerate to 1.8% in 2014. In April they said the economy would grow 0.8% and 1.9%, respectively. German economy was flourishing during the last years, when being compared to other European countries, and moreover, the pace of growth of German economy pulled out the whole region out of recession. And while latest sentiment data reflecting upbeat consumer sector, and pickup in investment, analysts are refraining from overoptimistic comments.
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