German business confidence in the economy fell sharply in March due to concerns about the corona crisis. The leading research institute Ifo reported it on the basis of a provisional estimate.
The Ifo confidence index stood at 87.7 against 96 in February. That is the strongest drop since 1991 and the lowest level for the indicator since August 2009.
The Ifo institute announced on Wednesday that it would publish the figure early due to the virus outbreak. It is the first time in seventy years that the Munich Institute has taken this step. On March 25, a final figure is scheduled.
The Ifo index is one of the most important economic barometers in Germany, along with the benchmark of the ZEW research institute for the confidence of investors and analysts in the economy. The ZEW index showed the strongest drop ever recorded on Tuesday before March due to the virus outbreak.
Ifo President Clemens Fuest wrote in a comment that Germany is entering a recession. He previously called for drastic measures to be taken to combat the damaging effects of the outbreak on the German economy.
Other economists also think that the German economy will enter a recession this year due to the crisis. Experts at the Hamburg research institute HWWI fear a shrinkage of 2.5 percent in 2020. This forecast is still provisional, as a longer and deeper recession looms as the pandemic continues to spread.
At the Berlin research institute DIW, the German economy is forecast to shrink by 0.1 percent this year. They believe that the largest economy in Europe will be hit hard by the crisis in the first two quarters of this year, but that there will be a strong revival later this year. That is an optimistic prognosis, the researchers acknowledge. If the outbreak uncertainty lasts longer, there may be a deeper recession.