German economic confidence slips, analysts forecast

Other News Materials 26 August 2008 06:03 (UTC +04:00)

German economic confidence slipped again, two key surveys to be released Tuesday are forecast to show, amid worries about the outlook for Europe's biggest economy.

While analysts predict Germany's closely watched Ifo business confidence index edged down to 97.2 points in August from 97.8 points in July, consumer sentiment in the country also fell back again.

The Nuremberg-based GfK group is forecast to say that its forward-looking German consumer confidence index fell from 2.1 points in August to 1.9 in September as surging inflation and on-going economic uncertainty hit the mood in the nation's households.

Based on a survey of 7,000 German executives, the July Ifo report could set the stage for the release this week of a batch of major economic sentiment surveys highlighting the brittle economic mood taking shape across Europe.

However, like the Ifo index, which is drawn up by Munich-based Ifo economic institute, the surveys are also expected to have gained support from the fall in both the euro and oil prices from record highs.

Already the fall in the euro and energy prices have helped to ease some of the pressures facing Europe's biggest economy with German investor confidence posting a surprise rebound in August, a key indicator released this month showed.

Drawn up by the Mannheim-based Centre for European Economic Research, the ZEW index rose 8.4 points to minus 55.5 points this month despite signs of slackening global growth and volatile financial markets.

Analysts had predicted that the index, which measures expectations six months down the track, would fall to minus 62 points in August. ( dpa )