BERLIN (Reuters) – Investors got more gloomy on prospects for the euro zone economy in June, dragged down by negative expectations for Germany, Europe’s biggest economy, a survey showed on Monday.
Economic analysis company Sentix said its monthly survey on investor views on the 20-member euro zone, which gauges whether investors are positive or negative on growth prospects, fell to minus 17 points for June from minus 13.1 in May.
Analysts polled by Reuters had expected it to fall to minus 15.1.
The index on the current situation in particular took a fall, dipping to minus 15.8 from minus 7.0, raising the question of whether recession had already begun in the Eurozone, Sentix said.
“A look at the Sentix data of the largest economy then clearly shows that the cause of the misery in Euroland is probably linked to the weakness of the German economy,” it said. “The biggest problem child in the Eurozone remains Germany.”
The German economy fell into recession in early 2023 after household spending, a key source of growth in Europe’s economic engine, succumbed to pressures from high inflation, an estimate from the statistics office showed last month.
German industry had a strong first quarter, benefiting from the easing of supply chain constraints and a backlog in orders, but incoming orders have recently declined, limiting companies to maintaining their activities rather than expanding them.
The Sentix index for Germany in June fell to the lowest since November last year, at minus 21.1, from minus 14.5 the previous month.
“No matter how hard the (German) Federal Minister of Economics tries, the story he is writing is not a positive summer fairytale,” the survey said.
The poll of 1,197 investors was conducted between June 1-3, Sentix said.
(Reporting by Riham Alkousaa; Editing by David Holmes)
