German Economic Confidence Falls Most Since 1991 On Recession Fears
March 17 2020 - 3:35AM
RTTF2
Germany's economic confidence logged its sharpest decline on
record in March as financial market experts fear recession due to
the coronavirus, or Covid-19, pandemic, results of a private survey
showed Tuesday.
The ZEW Indicator of Economic Sentiment plunged 58.2 points to
-49.5 in March, survey results from the ZEW - Leibniz Centre for
European Economic Research revealed.
This was the biggest fall since the survey began in 1991 and
reached its lowest level since December 2011. The score was also
worse than the economists' forecast of -27.2.
At the same time, the index measuring current economic situation
declined 27.4 points to -43.1 in March. The expected reading was
-30.0.
This combination of strongly negative values for both economic
sentiment and the assessment of the current situation were reported
only during the financial crisis in 2008.
"The economy is on red alert," ZEW President Achim Wambach
said.
"The financial market experts currently expect to see a decline
in real gross domestic product in the first quarter, while also
considering a further drop in the second quarter to be very
likely."
For the whole of 2020, the majority of experts currently expect
a decline in real GDP growth of approximately one percentage point
as a result of the coronavirus pandemic, Wambach noted.
ING economist Carsten Brzeski said the German economy is likely
to experience a recession in the first half of the year. Based on
the currently available information, the economist expects the
economy to shrink by more than 1.5 percent in 2020. Further,
financial market experts' sentiment concerning Eurozone also
worsened significantly, the survey showed. The corresponding
indicator dropped to -49.5 points in March.
Likewise, the indicator for the current economic situation
plunged 38.2 points to a reading of -48.5 points.
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