German investor confidence fell for the first time in three months after the country’s benchmark DAX index lost nearly 10 percent this year amid a China-induced rout in financial markets. What does that mean for Europe’s largest economy?
ZEW President Clemens Fuest says that while industries with a lot of exposure to China such as machinery and steel are bearing the brunt, domestic demand remains strong. A measure of current conditions jumped to the highest level in four months, indicating that growth will continue to exceed the economy’s potential -- at least in the near term. Gross domestic product rose 1.7 percent in 2015, and the Bundesbank predicts an increase of 1.8 percent this year.