The ZEW Business Sentiment Index for Germany fell into negative territory in March for the first time in nearly a year, dropping to -0.5 points, compared to a rise of 58.3 in February. This was below expectations of a rise to 39.0. The March decline occurred despite an improvement in the assessment of the current economic situation in Germany to -62.9, a rise of 3 points from February. This collapse comes amid escalating military conflict in the Middle East, increasing inflationary pressures, and risks to Germany’s economic recovery.

Meanwhile, the index for the Eurozone fell by 47.9 points to -8.5, compared to expectations of a rise to around 26.5. The assessment of the current situation also deteriorated by 16.3 points to -29.9.