German investor confidence fell further in April due to the war in Ukraine and soaring inflation. The German research institute ZEW reported this.
In fact, the index for economic expectations for the next six months is now at its lowest level since March 2020 at the start of the corona pandemic.
In March, the confidence index of the ZEW Institute already showed a historically sharp decline due to concerns about Ukraine. Investors fear that economic conditions will deteriorate further, according to the survey. ZEW president Achim Wambach states that the prospects for a period of stagflation, in which the economy weakens and inflation is high, will remain for the next six months.
The German economy is suffering from high inflation due to the sharp rise in energy prices as a result of the conflict in Ukraine. Germany is very dependent on Russia for its energy supply, especially natural gas. Berlin has said it wants to counteract that Russian dependence.
The German Federal Statistics Office said earlier that inflation based on the harmonized European measurement method rose to 7.6 percent in March. That is the highest level since German reunification in 1990. High energy prices, in particular, are driving inflation, but foodstuffs such as vegetable oils are also becoming more and more expensive. Ukraine is a major exporter of sunflower oil.