German Economic Sentiment Takes a Nosedive

The economic sentiment indicator in Germany plummeted to a negative 14 in April, marking a significant 65.6-point drop from the previous month and falling short of expectations, according to the Centre for European Economic Research (ZEW). Meanwhile, the current situation indicator saw a slight improvement, increasing by 6.4 points to negative 81.2.

Eurozone's Economic Outlook Also Worsens

The economic sentiment index for the Eurozone experienced a steep decline, dropping by 58.3 points to minus 18.5. The current situation indicator for the Eurozone also deteriorated, slipping by 5.7 points to negative 50.9.

Underlying Causes of the Decline

"The erratic changes in US trade policy are significantly impacting expectations in Germany, leading to a sharp decline. The announced reciprocal tariffs not only threaten global trade but also contribute to heightened uncertainty worldwide. This development is clearly reflected in the economic expectations for both Germany and the Eurozone," explained ZEW President Achim Wambach.