German investor confidence plummets amid Middle East war

2026-03-17 - 11:31

Germany has a range of energy-intensive sectors, including steel, cement and chemicals, that would be hit hard by high power costs. (EPA Images pic) FRANKFURT: German investor morale has plunged to its lowest level in almost a year as the Mideast war rattles market nerves in Europe’s largest economy, said a ZEW survey released Tuesday. Sentiment among investors on the future of the German economy fell 58.8 points in the past month and now sits at minus 0.5 points, the survey said, leaving it at its lowest level since US President Donald Trump first imposed sweeping global tariffs last April. “The ZEW index has plummeted,” said ZEW head Achum Wambach, adding that high energy prices threatened to derail Germany’s fragile recovery. “The extent of these effects depends on the duration and intensity of the conflict,” he said. “However, financial market experts are sceptical that the conflict will come to a swift end.” Oil and natural gas prices have surged since the end of last month, when the US and Israel attacked Iran, killed its supreme leader and plunged the Middle East into war. Iran has declared the Strait of Hormuz, a vital sea lane that normally transports about a fifth of the world’s oil and gas trade, closed to the shipping of countries it considers allied with the US and Israel. Trump has called for US allies and buyers of Iranian oil to help reopen the strait, warning that not doing so could be “very bad” for the future of the Nato alliance, but he has so far received a cool response. About 80% of survey respondents expected inflationary pressure in Germany and the eurozone, the ZEW said. Germany has a range of energy-intensive sectors, including steel, cement and chemicals, that would be hit hard by high power costs. ZEW polled 178 analysts and institutional investors in the second week of March for the latest edition of its survey.