Germany’s economic sentiment deteriorated sharply in April, with the ZEW Economic Sentiment index plunging from -0.5 to -17.2, well below expectations of -6.7, and marking the lowest level since late 2022.The weakness is not limited to expectations. The Current Situation Index fell from -62.9 to -73.7, also undershooting forecasts of -69.5, signaling that the economy is already under pressure.
Across the Eurozone, sentiment followed a similar pattern, with the headline index dropping from -8.5 to -20.4 and the current conditions gauge falling by -13.1 points to -43.0.
According to ZEW President Achim Wambach, the impact of the Iran War extends beyond rising energy costs. Businesses are increasingly concerned about “long-term shortages of energy supply”, which is discouraging investment and weakening the effectiveness of government support measures.
Sector data reinforces the negative trend. While expectations for the automotive sector remain deeply negative but stable, outlooks for chemicals, pharmaceuticals, and metals deteriorated significantly. Construction sentiment also turned negative. The broad-based decline suggests that the drag from geopolitical uncertainty is spreading across industries.
| Data | Latest | Previous |
|---|---|---|
| Germany ZEW Economic Sentiment | -17.2 | -0.5 |
| Germany Current Situation Index | -73.7 | -62.9 |
| Eurozone ZEW Economic Sentiment | -20.4 | -8.5 |
| Eurozone Current Situation Index | -43.0 | -29.9 |
