Investor confidence in Germany’s economy plummeted in April

Market confidence in Germany’s economy fell sharply as US President Donald Trump’s tariff policies could weigh on a budding GDP recovery, Bloomberg reports.

The ZEW research institute’s investor expectations index plunged from 51.6 in March to -14 in April. Analysts polled by the news agency had projected a drop to 10.

Market optimism about plans of the new Germany’s government to bolster public spending has faded after the US imposed tariffs on automobile imports and then on all goods from the European Union, Bloomberg notes. Since Trump’s announcement of duties, Germany's DAX stock index has lost 5%. 

Additionally, US trade policy has led Germany’s top research institutes to trim their forecast of economic growth in 2025 to just 0.1%. They have also warned that worse is possible.

The Bundesbank had earlier expected an upturn in the German economy in the first quarter of this year. However, this forecast may not materialize amid trade tensions, Bloomberg reports.