German Investors Less Pessimistic In October: ZEW

(RTTNews) - Germany's economic sentiment was less pessimistic in October, defying expectations for further worsening, but investors remained cautious about their current situation amid rising inflationary pressures and the weakening economic outlook.

The ZEW Indicator of Economic Sentiment, which measures overall expert opinions on the direction of the German economy over the next six months, rose to -59.2 in October from -61.9 in September, survey results from the ZEW - Leibniz Centre for European Economic Research showed Tuesday.

The indicator was forecast to fall to -65.7 from the September reading of -61.9, which was the lowest since late 1992. Investor morale improved for the first time in four months.

"Despite the slight rise in expectations, the economic outlook for Germany has thus deteriorated significantly," ZEW said.

The assessment of the current economic situation was worse than in the previous month. The corresponding index declined sharply by 11.7 points to -72.2 in October, while the same was expected to fall moderately to -68.0.

"The probability that real gross domestic product will decline in the course of the next six months has also increased considerably," ZEW President Achim Wambach said.

"Overall, the economic outlook has deteriorated again."

Last week, the International Monetary Fund projected an economic contraction for Germany next year.

Survey results from the ifo institute had revealed that business confidence and exporters' expectations hit 28-month lows in September.

The GfK survey showed that consumer sentiment is set to fall again to a fresh record low in October as high inflation and rising interest rates amid soaring energy prices hit income expectations, and in turn, consumer spending.

The survey found that although financial market analysts' confidence in the euro area somewhat increased, their assessment of the region weakened in October.

The euro area economic confidence index rose 1.0 point to -59.7. On the other hand, the current situation index logged a sharp fall of 11.7 points to -70.6 in October.

Further, the survey showed that inflation expectations for the eurozone continued to decline in October, as the index dropped significantly by 23.7 points to -35.8.