AFP, Frankfurt

German investor morale slid to its lowest level in over three years in April, a survey showed Tuesday, as the Middle East war threatens to snuff out a tentative recovery in Europe’s top economy.

Sentiment among investors on the future of the Germany economy fell 16.7 points in the past month and now sits at minus 17.2 points, the survey said.

Investor morale is now at its lowest point since December 2022, in the aftermath of Russia’s full-scale invasion of Ukraine as surging energy costs exacted a heavy toll on German manufacturers.

It is even lower than April last year, when US President Donald Trump unveiled sweeping global tariffs.

“Expectations are turning negative,” ZEW head Achim Wambach said, adding that concerns about energy supplies due to the Iran war were “holding back investment and undermining the impact of government stimulus measures”.

A splurge in public spending by Chancellor Friedrich Merz’s government was expected to kickstart a turnaround for the manufacturing powerhouse this year after several years in the doldrums.

But the surge in oil and gas prices triggered by the US-Israeli attacks on Iran and near total closure of the Strait of Hormuz have led economists to slash forecasts for this year.