(MENAFN– ecpulse) German business confidence, based on a survey of 7,000 executives, slipped more than estimates in August on geopolitical tensions in Ukraine and low inflation in the euro area.
The business climate index retreated for a fourth straight month in August to 106.3 from 108.0 recorded in July, coming below forecast of 107.0, the IFO institute said on Monday.
The current assessment gauge retreated to 111.1 from 112.9, compared to forecast of 112.0.
The expectations measure plunged to 101.7 from a prior of 103.4, lower than projection of 102.1.
A report released last week showed that German investor confidence resumed its drop for an eighth straight month in August to 8.6 from 27.1 in July.
The German economy dropped a 0.2 percent in the second quarter following a 0.7 percent expansion in the previous three months.
ECB President Mario Draghi has stressed that the risks stemming from the geopolitical tensions in Ukraine has increased.
"Geopolitical risks are heightened. And some of them, like the situation in Ukraine and Russia will have a greater impact on the euro area than they … have on other parts of the world," Draghi said.
In the coming period, the sanctions imposed on Russia by the EU and Russia’s ban to agricultural products will weigh growth prospects.
In addition, there are graving concerns from the low inflation in the eurozone and its impact on growth.
Draghi said last the week the bank may need to add more stimulus if inflation continued to retreat.
As of 09:30 GMT, the euro dropped against the U.S. dollar to trade around 1.3192 after touching a bottom of 1.3182.
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