By Scott Kanowsky
Investing.com -- Investors are more pessimistic about the German economy than they have been since the 2008 financial crisis, according to a monthly survey from the ZEW Institute on Tuesday, as fears rise over the impact of a potential energy crisis this winter.
The think tank's gauge of investor expectations dropped to -61.9 in September, down from -55.3 in the previous month and below forecasts for -60.0. A level under zero indicates pessimism, while a reading above zero suggests optimism.
"Together with the more negative assessment of the current situation, the outlook for the next six months has deteriorated further," said ZEW President Achim Wambach. "The prospect of energy shortages in winter has made expectations even more negative for large parts of the German industry."
Economists have recently cut their estimates for growth in Germany and warned of a spike in inflation, citing the effect of a drawdown in key westward natural gas supplies out of Russia.
On Monday, the Ifo Institute warned that it expects the German economy to contract next year and price growth to touch a high of 11%, as the decreased gas flows drive up energy costs for households and, in turn, force consumers to scale back spending on disposable items.
Meanwhile, German firms in major industries have flagged that they will need to rein in production in response to surging fuel prices.
Ifo added that €65 billion in new measures announced by the German government to limit the impact of inflation and stem sliding growth will "fall far short" of these objectives.