German economic sentiment plunges on trade war fears
Strong euro also weighing on outlook
A gauge of economic sentiment for Germany fell sharply in March, with the percentage of experts forecasting a decline over the coming six months almost doubling.
The Mannheim-based Center for European Economic Research (ZEW) cited fears of a trade war with the United States as the main factor weighing on the outlook for Germany’s economy. The concerns are also having a negative impact on the outlook for the euro zone, the survey found.
“Concerns over a US-led global trade conflict have made the experts more cautious in their prognoses. The strong euro is also hampering the economic outlook for Germany, a nation reliant on exports. Combined with the experts’ continued positive assessment of the current situation, however, the outlook is still largely positive,” said ZEW President Professor Achim Wambach.
The euro has climbed nearly 15% against the dollar over the past 12 months, while Germany’s benchmark DAX index looks headed toward its second monthly decline.
German Chancellor Angela Merkel is reportedly stepping up efforts to avert a trade conflict with the US, dispatching her economy minister Peter Altmaier to Washington on Monday. The close ally of Merkel expressed optimism after meeting with Trump administration officials.
“Both [commerce secretary Wilbur] Ross and I have the impression that decisive talks will take place this week and that it is possible to reach a solution that averts a difficult trade conflict,” Altmaier was quoted by Reuters as saying in Washington on Monday.