The Ifo business climate shows that companies are increasingly concerned about their future business. The most important German economic barometer fell for the first time since the beginning of the year.
The mood in the German economy surprisingly clouded over in July. The Ifo index for the business climate fell by 0.9 points to 100.8 points, as the Munich Institute announced.
The leading German economic barometer, which is based on a survey of around 9,000 companies, fell for the first time since the beginning of the year. Analysts were surprised by the development. They had expected an increase to 102.5 points on average.
The assessment of future business is decisive for the decline. The corresponding index value fell here, while the assessment of the current situation was again better. “Delivery bottlenecks for preliminary products and worries about increasing numbers of infections are burdening the German economy,” commented Ifo President Clemens Fuest.
According to Fuest’s assessment, the optimism in the boardrooms of German companies has “noticeably” decreased. In the service sector, which recently benefited particularly strongly from the relaxation of the corona measures, the business climate has deteriorated. Fuest pointed out, however, that the service providers are still expecting increasing sales, albeit not as strongly as in June.
“The course of the pandemic continues to be a risk factor for economic development,” commented chief economist Thomas Gitzel from VP Bank. In his opinion, the results of the Ifo survey indicate that the German economy is leaving the economic boom behind and will switch “from catching-up mode to normal mode” in the autumn.
The chief economist of Commerzbank, Jörg Krämer, assumes that the German economy will grow strongly in the summer half of the year. A possible fourth corona wave and the political reaction to it should weigh on the economy in the fourth quarter. “We expect a massive slowdown in growth, but not a shrinking economy,” said Krämer.
On the foreign exchange market, the euro came under pressure after the publication of the Ifo data and gave up the gains from early trading.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
