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Slip in investor confidence fails to cloud German outlook
[FRANKFURT] Confidence among German investors fell slightly in July, the ZEW economic institute said Tuesday, adding that the slide was not significant enough to trouble a largely positive outlook.
The institute's closely watched index measuring economic expectations for Germany shed 1.1 points to reach 17.5.
It was the second fall in a row and slightly worse than the result analysts surveyed by data company Factset had predicted.
Nevertheless, "the outlook for economic growth in the coming months remains quite positive... supported by the results for the eurozone," ZEW president Achim Wambach said, Investors' expectations for the 19 nations of the euro single currency area in the coming months fell more sharply than their judgement of Germany, falling 2.1 points to 35.6.
But while views of the present state of the German economy were slightly gloomier than in June, the survey revealed a much brighter picture of the euro zone overall.
"With growth already at a healthy pace, the message is a broadly encouraging one" from the survey, analyst Jennifer McKeown of Capital Economics commented on the results.
"We do not think that it is a sign of an economic slowdown to come."
Slightly less favourable conditions on financial markets this month are likely to have impacted investors' mood more strongly than any change in economic fundamentals, she argued.
Surveys such as the ZEW poll of investors or the Ifo institute's similar questioning of business leaders are used by analysts to help judge future economic growth.
Combined with "hard" indicators like measures of industrial production, they suggest that the German economy is performing well and will see powerful expansion in the months ahead.
But some observers caution that economic actors' mood can become detached from real-world performance, producing a too-optimistic picture in the surveys.
The ZEW results were based on a survey of 216 analysts and institutional investors.