German Business Sentiment Stable At 1-Year Low
May 25 2018 - 02:56AM
RTTF2
Germany's business confidence remained stable in May after
falling for five straight months, survey data from the Munich-based
Ifo Institute showed Friday.
The business climate index came in at 102.2 in May, unchanged
from April. This was the lowest reading since last May. The score
was forecast to drop to 102 from April's originally estimated
reading of 102.1.
Ifo President Clemens Fuest said the German economy is
performing well in a difficult international situation. The current
business survey and other indicators point to economic growth of
0.4 percent in the second quarter.
However, Joerg Kraemer, an analyst at Commerzbank, said the Ifo
business climate and other leading indicators continue to point
clearly downwards.
In addition, the interim strong appreciation of the euro
generally has a longer dampening effect, especially as the higher
oil price has added another negative factor, Kraemer noted.
Data released on May 24 showed that economic growth halved to
0.3 percent in the first quarter from 0.6 percent in the fourth
quarter, on weak trade and government spending.
According to Ifo, the very good current business situation
improved slightly, while the optimistic expectations logged a
marginal fall.
The current conditions index rose to 106.0 from 105.8 a month
ago. This was well above the expected level of 105.5. Meanwhile,
the expectations index declined to 98.5 from 98.7 in the previous
month.
In manufacturing, business confidence fell slightly as
expectations weakened again, which was partially offset by the
upward movement in current conditions.
In the services and retail, the business climate improved in
May. At the same time, the business climate in construction reached
a new record high.
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