By Eva Taylor and Kirsti Knolle
MANNHEIM, Germany, March 18 German analyst and
investor sentiment plunged in March at the fastest pace in
nearly a year amid fears that the crisis in Ukraine could weigh
on Europe's largest economy, a leading survey showed on Tuesday.
Mannheim-based think tank ZEW's monthly survey of economic
sentiment dropped to 46.6 from 55.7 in February, falling short
of even the lowest forecast of 49.9 in a Reuters poll of
analysts. The consensus forecast was for 53.0.
It was the sharpest fall since April 2013 and the third drop
in a row.
"The Crimea Crisis is weighing on expert's economic
expectations for Germany," said ZEW president Clemens Fuest.
"Nevertheless, the indicator's level suggests that the economic
upswing is currently not at risk."
The seizure of the Ukrainian region of Crimea by
Russian-speaking troops has prompted the most serious East-West
crisis since the end of the Cold War. The United States and
European Union imposed personal sanctions on Monday on Russian
and Crimean officials involved in the seizure.
The ZEW survey showed a separate gauge of current conditions
rose to 51.3 points from 50.0 in February, slightly
undershooting the forecast for a reading of 52.0 yet still
underscoring the strength of the German economy.
Christian Schulz, an economist at Berenberg Bank, said the
combination of emerging market turbulences earlier this year and
the stand-off between Russia and the West may have a "mildly
dampening impact on Germany's investment climate" and therefore
But he noted that "it would take a much more serious crisis
in Ukraine to derail the recovery in Germany and the euro zone
as a whole".
The German economy, a growth locomotive in the early years
of the euro crisis, has slowed in the last two years as exports
weakened and some firms delayed investments but the government
expects it to grow by 1.8 percent this year - more than four
times as strongly as in 2013 thanks to domestic demand.
Recent economic data has been upbeat with industrial output
and orders and exports rising in January. Other sentiment
indicators have also painted a rosy picture of the economy, with
consumers feeling their most positive in seven years and
business morale rising.
The ZEW index was based on a survey of 241 analysts and
investors conducted between March 3 and March 17, ZEW said.