The German economy is hurtling towards a recession as the war between Russia and Ukraine dampens investor optimism for Europe’s largest economy, according to a closely watched survey released today.
Moscow’s barbaric attack on Ukraine and the West’s sweeping sanctions to lock Russia out of the world economy are “significantly dampening Germany’s economic prospects,” said Achim Wambach, president of ZEW, the company that tracks investor sentiment in the country, today.
Optimism among German investors plummeted at an all-time high this month, falling to minus 39.3 from 54.3 last month.
The decline beat economists’ expectations of a 10-month reading for March.
Germany is heavily dependent on Russia for energy supplies, meaning production could be curtailed if oil and gas flows are disrupted by war or a move by European sanctions.
Oil and gas prices have faltered since the war began amid concerns about the safety of future supplies.
Higher energy costs are likely to constrain output in Germany’s manufacturing and industrial sectors, which generate a large portion of the country’s output.
The European Union has come close to banning imports of Russian energy.
The US has imposed an embargo on Russian oil, while the UK will stop buying Russian oil by the end of this year.
From City AM
Other top reads from Oilprice.com:
Comments are closed.