FX.co ★ German Economic Sentiment Falls to Over 3-Year Low

Germany’s ZEW Indicator of Economic Sentiment dropped by 16.7 points to -17.2 in April 2026, its lowest reading since December 2022 and well below market expectations of -5. This sharp decline, coming on the heels of March’s third-largest monthly fall in the index’s history, underscores mounting pessimism as the escalating conflict in the Middle East weighs heavily on Germany’s economic outlook. ZEW President Prof. Achim Wambach cautioned that the war involving Iran is affecting far more than prices, with fears of prolonged energy shortages discouraging investment and blunting the impact of government stimulus measures. Sector-specific expectations remain severely strained: the automotive industry held roughly steady at a very weak -44.2, while sentiment for the chemical and pharmaceutical industries fell by 11 points and for steel and metal production by 21 points. At the same time, expectations for the construction sector turned negative, slipping by 3.8 points.