Economists’ opinions on the increase in the Ifo business climate in February

FRANKFURT (dpa-AFX) – The mood in the German economy has improved somewhat. The Ifo business climate rose by 0.3 points to 85.5 points in February compared to the previous month. The most important leading indicator for the German economy has increased again after two setbacks in a row. The approximately 9,000 companies surveyed assessed their expectations of future business better. However, the assessment of the current situation remained unchanged.

Overview of economists’ assessments of the Ifo business climate:

Michael Holstein, chief economist at DZ Bank

“Companies are still complaining about a lack of orders, but at least business expectations for the coming months have improved slightly. Especially in consumer-related areas, the falling inflation rate and rising wages are causing a cautious improvement in sentiment. Overall, however, the still difficult environment is weighing on the situation high interest rates and the weak global economy are impacting export-oriented companies.”

Jörg Krämer, chief economist at Commerzbank

“The continued low level of the Ifo business climate supports our forecast that German gross domestic product will shrink again in the first quarter. For the whole of 2024, we continue to expect a decline in gross domestic product of 0.3 percent, even if the recession ends in the spring should, but this is unlikely to be followed by a strong recovery.”

Carsten Brzeski, Chief Economist ING Bank

“All in all, this week’s data releases and political events confirm our view of a further slight contraction in the German economy in the first quarter and a weak recovery thereafter.”

Thomas Gitzel, Chief Economist VP Bank

“There are three options for the German economy in 2024: recession, stagnation or mini-growth. A dynamic upswing is out of the question. With the rise in the ifo business climate index, at least hopes for mini-growth are growing.”

Tobias Basse, analyst NordLB

“Overall, the mood in the German economy remains quite unfriendly. As a result, the ECB will probably continue to be under noticeable pressure to act. The central bankers in Frankfurt will initially want to wait for further inflation data. In our opinion, a macroeconomic price environment should develop in the second quarter of 2024 which, given the economic situation in the monetary union, is an initial cautious one Interest rate cut by the ECB.”

Alexander Krüger, analyst at Hauck Aufhäuser Lamp

“The Ifo business climate improved only slightly in February. It remains far from good. Above all, the persistently poor assessment of the situation by the companies surveyed continues to give us pause. For the current quarter, we expect another GDP contraction and the onset of this into a technical recession.”

Patrick von der Ehe, analyst at IKB Deutsche Industriebank

“The current slight increase may be an initial sign of economic stabilization. However, this does not in any way reduce the pressure for politicians to act. IKB expects a decline in GDP of 0.2 percent in 2024. The risk of medium-term deindustrialization remains. “