Energy Crisis Poses Risk to German Recovery, Though Milder Than 2022 -- Market Talk

Dow Jones03-25 17:50

0950 GMT - Falling business sentiment suggests that the energy shock could upend hopes for a recovery in Germany, Franziska Palmas at Capital Economics says in a note. The Ifo business climate index fell to 86.4 in March from 88.4 in February. "The drop was entirely due to the expectations index, presumably reflecting concerns about the rise in energy prices and wider fallout from the war in the Middle East," Palmas says. But Germany looks more resilient compared with the energy shock of 2022. Price rises have so far been smaller, while a lot of energy-intensive production has been lost since then, Palmas says. "Germany also has more scope to loosen fiscal policy than most of its eurozone peers." Still, CapEcon downgrades its GDP forecast for 2026 to 0.5% from 0.8%. (don.forbes@wsj.com)

 

(END) Dow Jones Newswires

March 25, 2026 05:50 ET (09:50 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment