The economic research organization ZEW said on Tuesday that investor sentiment in Germany dropped in March. This is due to fears of a new financial crisis, ending a streak of five consecutive months of recovery.
In March, the institute’s index evaluating the economic outlook for the next six months decreased by 15.1 points. This is compared to the 17.1 forecasts by economic experts. The index’s new value was 13.0.
According to Achim Wambach, president of the ZEW, “global financial markets are under severe pressure.” This high level of uncertainty is reflected in people’s economic projections.
Credit Suisse, which has been in business for 167 years, ceased operations this month as a result of the market repercussions caused by the collapse of Silicon Valley Bank and Signature Bank in the United States. Investors fear that further financial time bombs may be hiding.
According to VP Bank’s chief economist, Thomas Gitzel, investors’ fears about banking sector turbulence impacting the economy are not unjustified. His remarks focused on the prospect that banks on both sides of the Atlantic may tighten their lending rules.
The chief economist at the private bank Hauck Aufhaeuser Lampe, Alexander Krueger, ascribed the fall in expectations to a normal reaction to recent events. He noted that recovery has “great potential” provided banks’ worries are not fulfilled.
Krueger stated, from an economic standpoint, a consistently unfavorable assessment of the status of the economy held a higher weight.
Germany’s economic outlook continued to deteriorate in March, falling to -46.5 from -45.1 the previous month and significantly below expectations of -44.3.
