German Economic Sentiment Hits 21-Month Low Amid US Tariff Concerns

Germany's economic sentiment has sharply declined in April, reaching a two-year low as concerns over U.S. trade policies under President Trump loom large. The ZEW Indicator of Economic Sentiment fell to -14 points from 51.6 in March, marking the steepest monthly decline since March 2022, reflecting significant uncertainty in the market. This downturn particularly impacts Germany's export-driven sectors, including automobiles and chemicals, which had shown signs of recovery. ZEW President Achim Wambach emphasized the unpredictability stemming from U.S. tariffs, which has exacerbated global economic uncertainty. Despite the worsening sentiment, experts do not foresee a new spike in inflation, potentially allowing the European Central Bank to consider further interest rate cuts to support the economy. The eurozone as a whole also experienced a decline in confidence, with sentiment dropping to -18.5 points in April, well below expectations.