FRANKFURT – A leading measure of investor confidence in Germany is expected to fall sharply as the Iran war continues unabated.
An analysts’ poll predicted that the forward-looking economic sentiment reading from a survey conducted by Germany’s ZEW economic institute will plummet to 39.2 points from last month’s 58.3 reading, which followed January’s 59.6 mark, the best since July 2021.
Another decline in the institute’s current conditions indicator is expected, which would keep it in negative territory – its home since December 2021. Analysts forecast a drop to -68.0 points from -65.9 in February.
The reading for the Eurozone is set to fall to 24.3 points from 39.4, according to analysts.
“The March round of survey results kicked off with a sizable fall in the Sentix measure of investor sentiment,” Oxford Economics wrote. “Geopolitical developments in recent days suggest the ZEW measure is likely to follow a similar trend.”
The Frankfurt-based pollster Sentix said last week that its headline index for Germany fell to -12.1 points in February, down from January's -6.9 points, the best mark since August of last year. “The picture is mixed,” the report said. “The assessment of the current situation actually improved, rising for the third time in a row to -25.0 points. This is the highest level for the situation index since July 2025, although it would be premature to celebrate: the economic situation is still rated as ‘poor’.”
Energy prices surge
Thanks to a virtual shipping standstill in the Strait of Hormuz, Brent crude pushed back above USD 100/b on Friday and was trading around USD 105 early Monday in Europe. It only cost some around USD 68/b at the beginning of the month. WTI was up significantly at around USD 100/b, with European natural gas futures also higher as the flow of LPG from the Gulf region dissipates.
Over the weekend, US President Donald Trump said in a social media post that he wants other nations – including Iranian ally China – to help secure shipping through the strait. The request came not long after German Chancellor Friedrich Merz said: “Germany is not a part of this war, and we don’t want to become one.”
Rising energy costs, input prices for the world’s economies, have economists concerned about their impact on growth. Last week, two major German economic institutes, Ifo and IFW, both reduced their outlook for German GDP this year to 0.8% from their winter forecast of 1.0%.
And Ifo said the slowdown will worsen if the war continues. “We currently expect the inflation rate to rise to just under 2.5% if oil and gas prices fall again within the next few weeks. However, if the prices for fossil fuels remain at the current greatly increased level for an extended period of time, inflation could peak at just under 3%. This would slow down growth by a further 0.2 percentage points to just 0.6% this year and by 0.4 percentage points to 0.8% next year,” according to Timo Wollmershäuser, Ifo’s head forecaster.
- Forward-looking measure forecast at 39.2 points (prev 58.3)
- Current conditions projected at -68.0 (prev -65.9)
- Soaring oil prices dim recovery hopes
- Data due Tuesday at 10:00 GMT / 11:00 CET
By Eric Culp, European Editor
LiveSquawk News
@eculp.bsky.social
@EricCulpLS
16 March 2026 | 10:00 GMT
FRANKFURT – A leading measure of investor confidence in Germany is expected to fall sharply as the Iran war continues unabated.
An analysts’ poll predicted that the forward-looking economic sentiment reading from a survey conducted by Germany’s ZEW economic institute will plummet to 39.2 points from last month’s 58.3 reading, which followed January’s 59.6 mark, the best since July 2021.
Another decline in the institute’s current conditions indicator is expected, which would keep it in negative territory – its home since December 2021. Analysts forecast a drop to -68.0 points from -65.9 in February.
The reading for the Eurozone is set to fall to 24.3 points from 39.4, according to analysts.
“The March round of survey results kicked off with a sizable fall in the Sentix measure of investor sentiment,” Oxford Economics wrote. “Geopolitical developments in recent days suggest the ZEW measure is likely to follow a similar trend.”
The Frankfurt-based pollster Sentix said last week that its headline index for Germany fell to -12.1 points in February, down from January's -6.9 points, the best mark since August of last year. “The picture is mixed,” the report said. “The assessment of the current situation actually improved, rising for the third time in a row to -25.0 points. This is the highest level for the situation index since July 2025, although it would be premature to celebrate: the economic situation is still rated as ‘poor’.”
Energy prices surge
Thanks to a virtual shipping standstill in the Strait of Hormuz, Brent crude pushed back above USD 100/b on Friday and was trading around USD 105 early Monday in Europe. It only cost some around USD 68/b at the beginning of the month. WTI was up significantly at around USD 100/b, with European natural gas futures also higher as the flow of LPG from the Gulf region dissipates.
Over the weekend, US President Donald Trump said in a social media post that he wants other nations – including Iranian ally China – to help secure shipping through the strait. The request came not long after German Chancellor Friedrich Merz said: “Germany is not a part of this war, and we don’t want to become one.”
Rising energy costs, input prices for the world’s economies, have economists concerned about their impact on growth. Last week, two major German economic institutes, Ifo and IFW, both reduced their outlook for German GDP this year to 0.8% from their winter forecast of 1.0%.
And Ifo said the slowdown will worsen if the war continues. “We currently expect the inflation rate to rise to just under 2.5% if oil and gas prices fall again within the next few weeks. However, if the prices for fossil fuels remain at the current greatly increased level for an extended period of time, inflation could peak at just under 3%. This would slow down growth by a further 0.2 percentage points to just 0.6% this year and by 0.4 percentage points to 0.8% next year,” according to Timo Wollmershäuser, Ifo’s head forecaster.
Eurozone inflation already surprised to the upside in February, further fanning concerns about growth in the currency union.
German business confidence improved last month, but that was before there was a war on.
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