(CercleFinance.com) – Returning to the ZEW index published in the morning in Germany, Capital Economics said it ‘now thinks that a recession is inevitable in the second half of this year, because the impact of high energy prices on households and industry takes effect’.
He points out that the index’s decline to -55.3 in August ‘left it below consensus forecasts and at its lowest level since October 2008 – slightly lower than the lows hit during the pandemic and the eurozone crisis’.
Capital Economics adds that while the current conditions index, at -47.6, remains ‘still much stronger than the lows reached during the pandemic and the global financial crisis’, it ‘clearly points to a recession’ based on past experience.
According to the London-based analyst firm, ‘German GDP will contract over the next three quarters as the headwinds of rising energy prices and rising interest rates gather pace’.
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