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German Business Climate Indicator Increased by 1.6 Points.

London, Wednesday, 25 January 2023

In January 2023, the Ifo Business Climate indicator for Germany increased by 1.6 points from the previous month to 90.2; this was a gain for the fourth month in a row and the highest level since June of last year.

The biggest economy in Europe began the year with cautious optimism due to declining inflation, improving prospects, and a reduction in supply chain stress.

While perceptions of current conditions have slightly worsened, expectations for the coming months have been much less pessimistic (86.4 vs. 83.2 in December) (94.1 vs 94.4).

Manufacturers' sentiment improved (-0.7 vs -5.7), as did that of service providers', traders', and builders' (-0.2 vs -1.2). (-21.6 vs -21.9).

A recession will probably be avoided, although the Ifo anticipates a minor contraction during the first quarter, primarily because of a fall in consumption.

(Source:  Ifo Institute) // Edited by: The Decision Maker - Finance editors


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