- Prior 86.4; revised to 86.3
- Current conditions 85.4 vs 86.2 expected
- Prior 86.7
- Outlook 83.3 vs 85.0 expected
- Prior 86.0; revised to 85.9
That is the lowest such reading since October 2022 as German business sentiment tumbles amid the fallout from the Middle East conflict. Adding to that, the outlook/expectations index also falls to its softest since August 2023.
It’s a rough look as surging energy prices is the main culprit in dragging down business and economic activity. We already saw that with the PMI readings and things will only get worse the longer the war drags on. That especially if there is still no progress in reopening the Strait of Hormuz.
As price pressures jump up while economic sentiment softens, it’s going to be a tricky road to navigate for the ECB. Germany had already seen more stubborn inflation pressures before the conflict started. So, this will add to stagflation worries as we look to the months ahead.
