The mood in the German economy has improved for the first time in six months. The Ifo business climate increased by 1.1 points to 86.9 points in October compared to the previous month, as the Ifo Institute announced on Wednesday in Munich. This is the first increase in Germany’s most important economic barometer since April. “The German economy sees a silver lining on the horizon,” said Ifo President Clemens Fuest, commenting on the results of the survey.
Analysts had expected an increase on average, but had only assumed 86.0 points. The Ifo business climate is based on a survey of around 9,000 companies.
In particular, the companies surveyed rated the current situation as better than expected. The corresponding index value rose by 0.5 points to 89.2 points in October, while analysts had expected another setback. Expectations for future business were also assessed better.
“The noticeable increase in the Ifo business climate indicates a stabilization of sentiment, but not yet an upward trend reversal,” commented chief economist Jörg Krämer from Commerzbank on the data. In his opinion, the business climate remains at a low level and still indicates that the German economy will shrink in the second half of the year.
The chief economist at VP Bank, Thomas Gitzel, at least sees “tender signals of hope” in the Ifo data. Both companies in the manufacturing and service sectors are therefore somewhat more confident about the future. “So there are signs of a certain bottoming out in the bad mood,” said Gitzel.
On the foreign exchange market, the Ifo data provided some support for the euro. The common currency was able to curb the losses somewhat in trading with the US dollar. (dpa)