Volkswagen scandal dampens German investors’ confidence

Berlin, Oct 13 (IANS) German investors’ confidence dropped for the seventh consecutive month in October as the Volkswagen emissions scandal created an additional cause for concern about the country’s economic outlook, a survey revealed on Tuesday.

The Centre for European Economic Research 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, Xinhua news agency reported.

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,” head Clemens Fuest said.

Volkswagen, Germany’s biggest auto maker, admitted last month that it cheated in emission tests around the world by installing a 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 the exports of Europe’s biggest economy.

Last week, leading German 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 labour market, increasing wages, low inflation and falling energy prices.

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