Investor Morale in the Euro Zone Dips

FRANKFURT (Reuters) – Investor morale in the euro zone fell in January to its lowest point in over a year, according to a survey released on Monday. Germany continues to weigh down the bloc’s economic outlook.

The Sentix index for the euro zone decreased to -17.7 in January from -17.5 in December, marking the lowest level since November 2023, although it surpassed analysts’ expectations of -18.0.

The survey remarks that the euro zone’s economic engine is at risk of long-term stagnation, while the recession in Germany, the bloc’s largest economy, is constraining progress.

Conducted from January 2 to January 4 among 1,121 investors, the survey indicated a slight improvement in expectations, rising to -5.0 in January from -5.8 the previous month. However, this was overshadowed by a decline in the current situation rating, which fell to -29.5 from -28.5, the lowest since October 2022.

Germany, which is facing federal elections next month, appears to be in recession and shows no signs of a quick recovery.