German business morale has slumped to its lowest level since 2009, a survey showed today, as the powerhouse of the Eurozone slides towards a coronavirus-induced recession.
The final reading of the Ifo Institute think tank’s business climate index fell to 86.1 in March from 96 in February. This was lower than an initial estimate and the steepest fall since German reunification in the 1990s.
Ifo president Clemens Fuest said: “The German economy is in shock.”
The dire reading – which followed a preliminary survey last week – came after the German government launched a €750bn package to fight the economic fallout from coronavirus.
There have now been more than 32,000 confirmed Covid-19 infections in Germany, resulting in 159 deaths.
Efforts to contain the virus have led to a steep fall in economic output in Europe’s biggest economy.
Germany’s stimulus package is a radical break with its “black zero” budget policies of the past, which say government spending must not outweigh income.
It will see the government take on new debt for the first time since 2013 as it aims to double the number of beds in intensive care units, offer hundreds of billions of euros of loans to firms and help small businesses and the self-employed.
“That’s a very big package with a lot of measures,” finance minister Olaf Scholz said after the package was launched.
Germany’s Dax stock index rose four per cent this morning after the US government announced a $2 trillion stimulus package for its economy.