Financial experts in Germany are much gloomier than expected when it comes to the economic outlook, according to a mood barometer published on Tuesday, saying inflation is playing a role.

The mood measure from the Mannheim-based research institute ZEW fell in April by 8.9 points to 4.1 points compared to the previous month, the Centre for European Economic Research (ZEW) announced in Mannheim on Tuesday.

Analysts had expected an increase to 15.6 points. The index had already slumped in March after five consecutive increases.

The financial market experts were still unsettled, wrote ZEW President Achim Wambach. The economic expectations signalled an unchanged economic situation in the next six months.

According to Wambach, expectations are negatively influenced by several factors.

“On the one hand, experts expect banks to be more cautious in granting loans. On the other hand, the still high inflation rates and the internationally restrictive monetary policy are a burden.”

On the positive side, the danger of an acute crisis on the international financial markets is no longer seen, he said.