German investor sentiment suffers record drop in March - ZEW

German investor sentiment suffered its biggest ever drop in March as the Russia-Ukraine conflict and sanctions on Russia weighed, according to a survey released on Tuesday by the ZEW Center for European Economic Research in Mannheim.

The headline ZEW investor expectations index fell to -39.4 from 54.3 in February, coming in well below expectations for a reading of 10.0. This marked the worst decline in expectations since the survey began in December 1991.

Meanwhile, the current situation index slid to -21.4 in March from -8.1 the month before.

ZEW President Professor Achim Wambach said: "A recession is becoming more and more likely. The war in Ukraine and the sanctions against Russia are significantly dampening the economic outlook for Germany. The collapsing economic expectations are accompanied by an extreme rise in inflation expectations. The experts therefore expect a stagflation in the coming months.

"The worsened outlook affects practically all sectors of the German economy, but especially the energy-intensive sectors and the financial sector."