German investor morale fell sharply again in September, more than forecasted by analysts, according to the ZEW Economic Research Institute on Tuesday, as the assessment of the economic situation continued its downward trend.
The economic sentiment index fell to 3.6 points from 19.2 points in August. Analysts polled by Reuters had pointed to a reading of 17.0.
"The hope for a swift improvement in the economic situation is visibly fading," said ZEW president Achim Wambach.
Expectations are plummeting because there is simply no light at the end of the tunnel, said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe. "The general trend toward falling growth forecasts is likely to continue," he said.
The assessment of the economic situation in Germany has also continued to worsen, with the indicator falling to minus 84.5 from minus 77.3, its lowest since May 2020.
"The miserable assessment of the situation points to another lost quarter on the growth side," Krueger said.
The German economy shrank in the second quarter, sparking fears of another recession, marked by two consecutive quarters of contraction.
"With the winter months approaching, the German economy also seems to be hibernating," said Thomas Gitzel, chief economist at VP Bank.
"Over the next few quarters, the German economy will be caught in a triangle between stagnation, slight growth and a slight contraction in gross domestic product (GDP)."
