German investor confidence dropped for the first time in three months in October, to near a record low, as the global credit crisis threatened to tip Europe into a recession. The ZEW Center for European Economic Research said its index of investor and analyst expectations slumped to minus 63 from minus 41.1 in September. The gauge reached an all-time low of minus 63.9 in July.
Germany's benchmark DAX share index dropped 22 percent last week, the most on record, as concern grew that bank failures and a credit-market freeze will drag the world into recession. German growth will slow to 0.2 percent in 2009 from 1.8 percent this year, the country's leading economic research institutes forecast today. Still, stocks surged after governments in Europe agreed to support banks and shore up financial markets.
Germany will provide as much as 500 billion euros ($683 billion) in loan guarantees and capital to bolster its banking system, the country's biggest government intervention since the Berlin Wall came down in 1989.
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