Mar 16, 2022 - World

Germany's expectations for economic growth are collapsing

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

The German economy is at the epicenter of the Russian energy shock, and expectations for growth are collapsing.

Why it matters: With the world's fourth-largest gross domestic product, Germany's trade-dependent economy could be poised for a painful period of transition as the cornerstones of its model — free-flowing energy from Russia and strong demand from China — seem to be crumbling more every day.

Driving the news: A closely watched index of economic sentiment in Germany produced by ZEW (Leibniz Centre for European Economic Research) dropped by the largest amount on record in March.

  • "A recession is becoming more and more likely. The war in Ukraine and the sanctions against Russia are significantly dampening the economic outlook for Germany," said Achim Wambach, president of ZEW.

Go deeper: How the war in Ukraine hurts the U.S. economy

Go deeper