German business sentiment improved in January
2023.01.25 06:40
German business sentiment improved in January
By Ray Johnson
Budrigannews.com – According to a survey released on Wednesday, Germany’s largest economy started the new year with lower inflation and a brighter outlook, which helped boost business morale in January.
According to the Ifo institute, the business climate index increased to 90.2, up from 88.6 in December and in line with analyst consensus, according to a Reuters poll.
Clemens Fuest, the president of Ifo, stated:
“The German economy is starting the new year with more confidence.”
According to Ifo, the increase is driven by expectations that are significantly less pessimistic. On the other hand, businesses were somewhat less satisfied with their current situation.
Ifo’s economist Klaus Wohlrabe stated, “There probably won’t be a recession, but GDP could shrink slightly in the first quarter.”
Capital Economics senior Europe economist Franziska Palmas noted that current circumstances remained challenging.
“A reminder that the economy is not out of the woods yet is the fall in its current conditions index.”
With price-adjusted growth of 0.2 percent, the largest economy in the Eurozone is expected to avoid recession this year, according to the German government’s annual economic report.
“A simple policy recipe that the German government has successfully used for the past 15 years and recently perfected is the reason for this resilience, not so much the structure of the economy as it is a simple policy recipe.” fiscal stimulus,” ING’s global head of macro Carsten Brzeski stated.
He stated that the reopening of the Chinese economy and lower wholesale gas prices have also increased economic confidence.
Brzeski stated:
“However, the fact that the German economy appears to have avoided the worst doesn’t necessarily mean the outlook is rosy.”
Commerzbank (ETR:) reports that “the easing on the gas market further diminished companies’ fears of a severe recession” and that “the Ifo business climate has recovered significantly for the third time in a row.” Joerg Kraemer, chief economist, stated.
He added, however, that the index is still at a level at which recessions have occurred frequently in the past.
