Record slump in German investor morale raises spectre of recession -Breaking
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BERLIN (Reuters).- German investor sentiment fell to a new record in March because of the conflict in Ukraine and Russian economic sanctions, a poll showed. With falling expectations, a possible recession in Europe’s biggest economy is “more likely”
According to ZEW, its economic sentiment index fell from 54.3 points in February to -39.3. This was the largest drop since December 1991, when the survey started. A Reuters poll indicated a March reading of 10.0
A recession is more probable. Achim Wambach (ZEW President) stated in a statement that Russia’s sanctions and war in Ukraine are seriously affecting Germany’s economic prospects.
He said, “The collapsed economic expectations are accompanied with an extreme increase in inflation expectations.”
The index for current conditions decreased to 21.4 points from 8.1. A consensus prediction was that the reading would be -22.5
The German finance minister stated Monday that while the government would approve Wednesday’s draft 2022 budget, the parliament would receive supplementary fiscal plans in the coming weeks. This is to account for the economic effects of the conflict in Ukraine.
Volkswagen CEO Herbert Diess (DE:), a clear indication of the impact on corporate Germany of the Ukraine crisis, stated Tuesday that the total effect of the war wasn’t yet known and would affect Volkswagen’s outlook for 2022.
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