German investors lose their confidence in Europe’s growth engine

The confidence of important investors and analysts from Germany about the current state of the economy and its future evolution was worse than expected, reaching its lowest level in two years after eight months of consecutive falls.

This loss of confidence in the evolution of Europe’s growth engine by various market agents has been observed for some months, as other activity indicators, especially the industrial production and exports have been weakening. Two factors are causing the slowdown in German growth in recent months:

i) the conflict in Ukraine and the consequent sanctions between Western powers and Russia

ii) the weakness of the other major economies of the euro area, specifically France and Italy, very important markets for Germany.