21.03.202311:53:00UTC+00German ZEW Economic Confidence Declines Sharply In March

German economic confidence declined sharply in March reflecting the turmoil in the global financial markets, a closely-watched survey showed Tuesday.

The ZEW Indicator of Economic Sentiment declined to 13.0 in March from 28.1 in February, the Mannheim-based think tank said.

The index dropped after five successive months of improvement. Although the score has remained positive for the third straight month, this was below economists' forecast of 17.1. The current situation index dropped to -46.5 from -45.1 in the previous month. The reading was forecast to improve to -44.3.

"The assessment of the earnings development of banks has deteriorated considerably, although it still remains slightly positive," ZEW President Achim Wambach said. "The estimates for the insurance industry have also declined significantly."

In the monthly report, Bundesbank said the German economy is likely to fall in the first quarter but the decline will be slower than in the final quarter of 2022.

However, the second consecutive quarter of contraction suggests that the economy entered a technical recession.

Financial market experts' sentiment concerning the economic development of the euro area also worsened notably in March, ZEW survey showed. The economic sentiment index plunged 19.7 points to 10.0. At the same time, the current situation index declined 3.0 points to -44.6 in March.