A long spell of boosted business confidence in Germany has come to end. A closely-watched barometer by a leading economic think tank showed there was renewed unease about the prospects of eurozone recovery.
German business confidence posted a surprise drop in March, the Munich-based Ifo economic institute reported Friday.
It said its index measuring the mood in German boardrooms slumped to 106.7 points this month, down from a February reading of 107.4 points. The decline ended four consecutive monthly gains in the barometer.
Ifo President Hans-Werner Sinn said there was no need to panic.
"The German economy is holding its own with a good domestic performance in a difficult environment," he said in a statement.
The survey of 7,000 executives saw a drop in both of its indices, gauging managers' business expectations and highlighting the assessment of their current situation respectively.
"If Cyprus were to go bust, you can expect a deterioration of the eurozone crisis which would negatively impact German exports," Deutsche Bank economist Oliver Rakau told the Reuters news agency.
The German economy had gotten off to a surprisingly slow start in the new year. Industrial orders dipped by 1.9 percent in January as demand in crisis-stricken southern European nations took another blow.
hg/pfd (dpa, Reuters, AFP)