2017.08.2207:40:00UTC+00German Economic Confidence Tumbles To 10-month Low

Germany's economic confidence weakened for the third straight month to hit a 10-month low in August, reflecting weak exports and scandals in the auto sector.

The ZEW Indicator of Economic Sentiment declined to 10.0 in August from 17.5 in July, survey data from the Mannheim-based Centre for European Economic Research/ZEW showed Tuesday.

This was the lowest score since October 2016, when the reading was 6.2. The indicator has remained significantly below the long-term average of 23.8 points and the expected level of 15.0.

Meanwhile, the assessment of the current economic situation improved unexpectedly in August. The corresponding index rose to 86.7 from 86.4 in July, while it was forecast to drop to 85.2.

ZEW President Achim Wambach attributed the significant decrease of the ZEW economic sentiment indicator to the high degree of nervousness over the future path of growth in Germany.

"Both weaker than expected German exports as well as the widening scandal in the German automobile sector in particular have helped contribute to this situation," Wambach said.

"Overall, the economic outlook still remains relatively stable at a fairly high level."

August's fall in German investor sentiment probably reflects the euro's continued rise and recent falls in equity prices, Stephen Brown, an economist at Capital Economics, said. But this not a sign of an economic slowdown to come, the economist added.

Bundesbank on Monday said the biggest euro area economy is set to continue its strong momentum in the current quarter.

The central bank said GDP growth in the current year could even be somewhat stronger than the 1.9 percent projected in June.

The economic expectations index for the euro area decreased by 6.3 points to 29.3 in August. The decline of Eurozone growth expectations was thus slightly lower than those for Germany.

By contrast, the indicator for the current economic situation of the Eurozone climbed significantly by 9.7 points to 38.4 points in August. The score reached its highest level since January 2008.