German economic outlook bleaker in November after government collapse, Trump victory

LONDON (ICIS)–Germany’s economic outlook grew more pessimistic in November following the collapse of the country’s coalition government and Donald Trump’s victory in the US election.

An assessment of the current economic situation in Europe’s largest chemicals producer was also bleaker, economic research group ZEW said on Tuesday.

Its November, economic sentiment indicator fell by 5.7 points from the previous month to 7.4 points. ZEW’s indicator for the current situation was also down, by 4.5 points to -91.4 points.

“Economic expectations for Germany have been overshadowed by Trump’s victory and the collapse of the German government coalition,” ZEW president Achim Wambach said in a statement.

“Economic sentiment has declined – and the outcome of the US presidential election is likely to be the main reason for this. The fact that economic expectations for the USA are clearly rising, while economic sentiment for China and the eurozone is falling, supports this view,” Wambach added.

The ZEW president also pointed to some optimism with expectations of improving economic prospects for Germany due to upcoming snap elections after the collapse of its coalition government on 7 November.

For the eurozone, the group’s economic sentiment indicator fell by 7.6 points to 12.5 points, while the current situation index remained in negative territory at -43.8 points, down by 3.0 points from the previous month.