Falling interest and the planned billion dollar investments by the new federal government into the infrastructure further open the mood in the German economy.
In June, the IFO business climate increased by 0.9 points to 88.4 points, as the IFO Institute announced in Munich on Tuesday. The most important German economic barometer rose for the sixth month in a row and has reached the highest value since May 2024. “The German economy is slowly taking confidence,” commented IFO President Clemens Fuest.
Economists: Inside, an increase in the Ifo index had expected, but on average only to 88.0 points. The survey of around 9,000 companies hardly showed an improvement when evaluating the current situation. The expectations of future business, on the other hand, will be assessed much better.
The mood in the field of services was particularly bright. In contrast, the business climate improved easily in the industrial drives. The companies of the processing trade “are still very dissatisfied with the order stock”, the statement says.
In general, however, there are good reasons for careful confidence, said analyst Jens-Oliver Niklasch from the Landesbank Baden-Württemberg. In his opinion, the falling interest and billion dollar investments by the federal government ensure a better atmosphere. However, Niklasch still sees a risk to the economy in the US government’s trade policy.
For the chief economist of VP Bank, Thomas Gitzel, the better mood in the companies is surprisingly in view of the conflict in the Middle East and the still not clarified customs question with the USA. “It is probably the great infrastructure program launched by the new German government that gives the prospect of boosting the inland economy,” said Gitzel. In addition, a relief of entrepreneurs planned by the Federal Government has come to the fore again and should have contributed to the noticeably better mood.