Germany’s economy is hurtling towards recession as the Russia-Ukraine war undermines investor optimism for Europe’s biggest economy, a closely watched survey released today reveals.
Moscow’s barbaric assault on Ukraine and the set of sanctions imposed by the West to shut Russia out of the global economy “significantly darken Germany’s economic prospects”, Achim Wambach said today. chairman of ZEW, the company that tracks investor sentiment in the country. .
Optimism among German investors collapsed at the fastest pace on record this month, dropping to minus 39.3 from 54.3 last month.
The decline shattered expectations of economists, who had expected a reading of 10 for March.
Germany is heavily dependent on Russia for its energy supplies, meaning production could be curtailed if oil and gas flows are disrupted by war or a step in European sanctions.
Oil and gas prices have soared since the start of the war due to concerns about the security of future supplies.
Rising energy costs are expected to limit output from Germany’s manufacturing and industrial industries, which generate a large share of the country’s output.
The European Union has refrained from banning Russian energy imports.
The United States has imposed an embargo on Russian oil, while the United Kingdom will stop buying Russian oil by the end of this year.