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Ukraine war knocks German business confidence: survey

BERLIN (AFP) – The business climate in Europe’s top economy worsened in March, German survey data showed yesterday, amid fears over soaring energy prices and deepening supply chain woes due to the Ukraine invasion.

“War in Ukraine sends Ifo business climate index crashing,” said the Munich-based institute as its closely watched indicator plunged to 90.8 points from 98.5 in February.

“Companies in Germany are expecting hard times,” Ifo president Clemens Fuest said, noting that the “historic” 13.3-point drop in the indicator surpassed even the 11.8-point fall at the start of the pandemic two years ago.

Fuest said in a statement that the business climate in the flagship manufacturing industries had never declined so sharply, with “optimism giving way to clear pessimism” in the business outlook as well.

Senior economist at LBBW bank Jens-Oliver Niklasch said the grim numbers came in broadly in line with forecasts.

“Insecurity is very high due to the war,” he said, noting that economic growth projections for Germany had been corrected downward in recent days.