(Finance) – Historic collapse of the German ZEW index in March, signaling a worsening of economic sentiment in the coming months. The leading indicator actually dropped to -39.3 points from +54.3 in February. This is the largest drop in expectations since the start of the survey launched in December 1991. The data, elaborated by the German research institute ZEW Institute, is even worse than the expectations of analysts who estimated a drop of up to 10 points.
Expectations on current conditions also worsened, reaching -21.4 points.
“A recession is becoming more and more likely. The war in Ukraine and the sanctions against Russia are significantly dampening the economic prospects for Germany “- underlines the Professor Achim Wambach, president of ZEW – adding that “the collapse of economic expectations is accompanied by a sharp rise in inflation expectations. Experts therefore expect stagflation in the coming months. The deteriorated outlook affects virtually all sectors of the German economybut in particular the energy-intensive sectors and the financial sector “.