War in Ukraine Sees German IFO Expectations Dive

IFO BUSINESS CLIMATE 90.8 (FORECAST 94.2); FEB 98.5r

IFO CURRENT ASSESSMENT 97.0 (FORECAST 96.6); FEB 98.6

IFO EXPECTATIONS 85.1(FORECAST 92.0); FEB 98.4r

• Germany IFO indexes fell across the board in the March print, with substantial slumps seen in business climate 7.7 point drop to 90.8 and expectations with a 13.3 drop to 85.1.
• Business climate and expectations were both notably below forecasts, with future expectations 6.9 points lower than the consensus expected.
• The March 2022 fall in expectations was a series record, the 13.3 drop outpaced the 11.8 point fall at the onset of the pandemic.
• MNI highlighted significant downside expectations to this data following pessimistic Eurozone consumer/business confidence surveys elsewhere in the eurozone.
• The manufacturing and trade indexes fell faster than before seen, driven by pessimistic expectations due to the outbreak of war in Ukraine.
• Business and consumer confidence in the region have fallen drastically, as increased inflationary pressures due to higher oil and energy prices as well as worsened supply chain disruptions see a further squeeze on real disposable incomes.