Finland Times

This picture taken on September 28, 2015 shows the logo of German car maker Volkswagen (VW) is seen at the entrance to a VW branch in Duesseldorf, western Germany. File Photo AFP-Lehtikuva

German investors' confidence dropped for the seventh consecutive month in October as the Volkswagen emissions scandal created an additional cause for concern regarding the country's economic outlook, a survey found on Tuesday.

 

     The Centre for European Economic Research (ZEW) said its monthly indicator measuring financial analysts and investors' confidence declined by 10.2 points to 1.9 points in October. This was the seventh drop in a row and the figure was at its lowest since October last year.

 

     The Mannheim-based think tank said the Volkswagen emission scandal added to investors' concerns. "The exhaust gas scandal of Volkswagen and the weak growth of emerging markets has dampened the economic outlook for Germany," its head Clemens Fuest said.

 

     Volkswagen, Germany's biggest auto maker, admitted last month that it cheated in emission tests around the world by installing software in its diesel engine cars to manipulate emission data. The scandal, which involves 11 million vehicles worldwide, hit Volkswagen's business significantly and shamed the respected "Made in Germany" reputation.

 

     Analysts feared the scandal would hurt the German auto industry and further the exports of Europe's biggest economy.

 

     Another indicator released by ZEW on Tuesday showed that investors' assessment of the current situation in Germany also declined in October. In August, German exports, industrial orders and output all slumped, triggering speculations that the growth of the German economy had encountered a headwind.

 

     Fuest, however, said it was "rather unlikely that the German economy will slide into recession" as the country's domestic economy remained robust and its eurozone partners continued to recover.

 

     Last week, German leading economic institutes cut their forecast for German growth to 1.8 percent in 2015. Private consumption was expected to continue acting as the main driving force thanks to a stable labor market, increasing wages, low inflation and falling energy prices.