Investor confidence in the euro zone fell unexpectedly in March for the first time since October, according to a survey by Sentix.
The Sentix index for the euro zone dropped to -11.1 points in March, down from -8.0 in February, defying analysts’ expectations of a rise to -6.3.
The decline was mainly driven by a sharp drop in economic expectations, with concerns that the usual spring economic revival may not occur.
While the index for the current situation rose for the fifth consecutive month to -9.3 from -10.0, it remained in negative territory, suggesting the economy is still stagnating.
The expectations index, which had shown steady improvement in recent months, plunged to -13.0 in March from -6.0 in February, reflecting growing pessimism among investors.
“This stagnation phase could soon turn into renewed recession worries if the negative economic expectations materialize,” warned Sentix Managing Director Manfred Huebner.
Huebner also pointed out that weak money supply growth, coupled with rising interest rates, could become a significant burden on the euro zone economy later this year.
The survey, conducted by Sentix from March 2 to 4, involved 1,309 investors.
