Inflation Creates Recession Anxiety, Lowering Investor Confidence In Germany.

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German investor sentiment fell slightly in August on concerns the rising cost of living will hit private consumption, and suggesting Europe’s largest economy is tipping into recession.

The ZEW economic research institute said on Tuesday its economic sentiment index fell to -55.3 points from -53.8 in July. A Reuters poll had pointed to an August reading of -53.8.

“The still high inflation rates and the expected additional costs for heating and energy lead to a decrease in profit expectations for the private consumption sector,” ZEW researcher Michael Schroeder said in a statement.

The German economy stagnated in the second quarter, with the war in Ukraine, soaring energy prices.

The pandemic and supply disruptions bringing it to the edge of a downturn. Inflation is running at 8.5%.

Reuters.

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