(Bloomberg) -- Investor confidence in Germany's growth outlook unexpectedly weakened in May for the first time since October, underlining the fragility of Europe's largest economy as it struggles to overcome a slowdown and global trade tensions worsen.
A gauge measuring prospects for the next six months dropped to minus 2.1 in May. Economists had expected a slight increase to 5 from 3.1 in April.
A resurgent trade dispute between the U.S. and China risks spilling over to German companies, and knocking the economy back after nascent signs that it has started to stabilize. Stocks have tumbled -- the DAX Index slid almost 3 percent last week.
“Financial market experts continue to expect restrained economic growth in Germany for the next six months,” ZEW President Professor Achim Wambach said. The escalation in the trade dispute “increases the uncertainty regarding German exports -- a key factor for growth.”
Read more: U.S. Readies New Tariffs as Trump Says He'll Meet China's Xi
Germany reports its first-quarter GDP figures on Wednesday, with analysts in a Bloomberg survey predicting an expansion of 0.4 percent after a stagnant end to 2018, echoing the rebound in the euro zone as a whole. Still, Bundesbank President Jens Weidmann has warned that the better figures might reflect temporary factors such as mild weather and he sees no “comprehensive” improvement so far.
--With assistance from Kristian Siedenburg, Harumi Ichikura and Catarina Saraiva.
To contact the reporter on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Fergal O'Brien
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
