By Maria Martinez BERLIN, March 17 (Reuters) - German investor morale slid far more than expected in March, the ZEW economic research institute said on Tuesday, as price pressures increase with the
German investor morale collapses in March, ZEW finds
Sharp Decline in German Investor Sentiment Amid Global Tensions
By Maria Martinez
BERLIN, March 17 (Reuters) - German investor morale slid far more than expected in March, posting the biggest decline since February 2022 when the war in Ukraine started as price pressures increase with the conflict in the Middle East.
The indicator of economic sentiment fell to -0.5 points in March, the ZEW economic research institute said on Tuesday, the lowest since April 2025.
Analysts polled by Reuters had expected the reading to fall to 39.0 points, from last month's 58.3.
Impact of Middle East Conflict on Economic Recovery
MIDDLE EAST CONFLICT THREATENS ECONOMIC RECOVERY
“The ZEW Indicator has collapsed," said ZEW President Achim Wambach, adding that inflationary pressure heightens the risk of a slowdown in Germany's nascent recovery.
How strong these effects will turn out to be depends on the intensity and the duration of the conflict, Wambach said.
The financial market experts are sceptical that a quick resolution of the conflict will take place, according to Wambach.
Expert Opinions on Investor Sentiment
"This once again shows that the war, which has now been going on for more than two weeks, is leaving deep scars," said Ulrich Wortberg, economist at Helaba.
The survey was conducted between March 9 and March 16. On February 28, the United States and Israel attacked Iran after weeks of military buildup.
"The Iran war has hit investors hard in the gut. The fiscal package and fuller order books are now taking a back seat," said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe.
He added that sentiment hinges on the question of when oil and gas supplies will once again be delivered without risk.
"As things stand, the German economy has mutated from a source of hope back into a cause for concern," Krueger said.
Forecasts and Outlook for the German Economy
Deutsche Bank has cut its 2026 growth forecast to 1.0% from 1.5% in December.
"However, we do not expect the recovery of the German economy to come to a complete standstill," said Marc Schattenberg, economist at Deutsche Bank Research.
While investor morale plummeted, the indicator for the current economic situation was at minus 62.9 points, up from minus 65.9 in the previous month.
"Looking ahead, the surge in energy prices resulting from the ongoing conflict in the Middle East will weigh on sentiment for a while yet," said Ankita Amajuri, Europe economist at Pantheon Macroeconomics.
Reporting Credits
(Reporting by Miranda Murray, Maria Martinez and Rene WagnerEditing by Madeline Chambers, Kirsten Donovan and Chizu Nomiyama )
