BERLIN (Reuters) -German investor morale clouded over in November, an economic research institute said on Tuesday, saying that the uncertainty unleashed by Donald Trump’s U.S. election win and the collapse of the German government had overshadowed economic expectations.
The ZEW Institute reported a stronger-than-expected decline in its economic sentiment index to 7.4 points from 13.1 points in October. Analysts polled by Reuters had pointed to a reading of 13.0.
Europe’s largest economy has been skirting recession and must now cope with political upheaval following the collapse of Chancellor Olaf Scholz’s three-way coalition last week.
A day after Trump’s re-election in the United States raised concerns for German companies, Scholz fired his finance minister in a row over how to revive the ailing economy, setting the stage for a snap election early next year.
“In the current survey, economic sentiment has declined – and the outcome of the U.S. presidential election is likely to be the main reason for this,” said ZEW president Achim Wambach.
“Still, more optimistic voices were heard in the last survey days, expecting economic prospects for Germany to improve with snap elections on the horizon,” Wambach added, referring to a “very dynamic development of economic expectations”.
The assessment of the current economic situation also worsened, to minus 91.4 points in November from minus 86.9 the previous month, according to the survey. Economists polled by Reuters had expected a minor improvement to minus 85.9.
(Reporting by Rachel More, Editing by Friederike Heine, Matthias Williams and Kevin Liffey)
