German business confidence plummeted in March as firms were concerned about rising energy prices and the stability of supply chains due to Russia’s invasion of Ukraine.
- The Ifo institute stated its business climate index fell to 90.8 in March from a downwardly revised 98.5 in February.
- Clemens Fuest, the Ifo president, stated that companies in Germany are expecting hard times, further noting that the historic 13.3-point drop in the indicator surpassed the 11.8-point plunged at the start of the pandemic.
- The index for business expectations also plunged to 85.1 from 98.4, the sharpest decline since the pandemic started.
- Fuest further stated that the business climate in the flagship manufacturing industries has fallen sharply with pessimism in the business outlook.
Bottlenecks in the supply of raw materials were already affecting heavily on Europe’s largest economy, which heavily depended on its strength from the export-strong sector.
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