Eurozone investor sentiment declined for the third straight month to hit an eight-month low in July, suggesting that the region remained in a recessionary mode and the situation is more severe than the usual summer lull, survey results from the behavioural research institute Sentix showed on Monday.
The Sentix economic index posted -22.5 in July, which was the lowest since November 2022, when euro area was facing acute energy crisis. The reading was forecast to fall to -17.9 from -17.0 in June.
Both the current situation and expectation measures of the survey reached the lowest since November 2022.
The current situation index declined to -20.5 in July from -15.8 in the previous month. The expectations index registered -24.5, down from -18.3 in June.
The currency bloc remains in recession mode and there is nothing positive to report in terms of forward-looking expectations, Sentix said. Investors do not expect central banks to support the economy with loose monetary policy, the think tank added.
The situation in Germany remained particularly dramatic, Sentix said, adding that the finding of a representative survey that people consider their own government to be the “greatest risk” is unique and frightening.
Germany’s investor sentiment index slid to -28.4 in July from -21.1 in the previous month. Situation as well as expectations values declined notably, with situation index hitting the lowest since October 2022.
The International Monetary Fund has forecast the 20-nation euro region to grow just 0.8 percent in 2023 and 1.4 percent next year. Meanwhile, the German economy is projected to shrink 0.1 percent this year.
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