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 today.
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. The drop 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 US and European Union imposed personal sanctions yesterday on Russian and Crimean officials involved in the seizure.
The ZEW survey showed a separate gauge of current conditionsrose to 51.3 points from 50 in February, slightly undershooting the forecast for a reading of 52 but still emphasising the strength of the German economy.
The German economy, a growth engine 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% 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 andinvestors conducted between March 3 and March 17, ZEW said.