German investor confidence drops

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Frankfurt -

Investment sentiment in Germany fell to its lowest level for 18 months in June amid concern Europe's top economy is losing momentum, a survey found on Tuesday.

The widely watched investor confidence index calculated by the ZEW economic institute fell by 3.3 points to 29.8 points in June, it said in a statement.

Analysts had been projecting a slight increase to around 35 points this month.

“The indicator has decreased for the sixth time in a row,” said ZEW president Clemens Fuest.

“The recent decrease, however, was notably less significant than the May decrease, when the indicator lost more than ten points.

“The German economy is currently in a very good shape, but further increases are becoming more difficult,” Fuest said.

“We had a strong first quarter in 2014 due to favourable weather conditions, but signs are that the second quarter will be weaker,” he said.

For the survey, ZEW questions analysts and institutional investors about their current assessment of the economic situation in Germany, as well as their expectations for the coming months.

The sub-index measuring financial market players' view of the current economic situation in Germany rose by 5.6 points to 67.7 points in June its highest level since July 2011.

A frequent criticism of the ZEW index is that it can be volatile and is therefore not particularly reliable. - Sapa-AFP

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