Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

German business sentiment points to likelihood of longer recession

German business sentiment points to likelihood of longer recession

BERLIN (Reuters) -German business morale worsened for the second consecutive month in June, a survey showed on Monday, indicating that Europe’s largest economy faces an uphill battle to shake off recession.

The Ifo institute said its business climate index fell to 88.5 this month from 91.5 in May. A Reuters poll of analysts had predicted a smaller drop to 90.7 in June.

“Sentiment in the German economy has clouded over noticeably,” Ifo’s president Clemens Fuest said.

Expectations were much more pessimistic, with the related index falling to 83.6 from May’s 88.3. Companies also assessed their current situation more poorly, with that index falling to 93.7 from 94.8.

The economy faces the prospect of a longer recession as domestic demand and the expectations of exporters have both weakened, Klaus Wohlrabe, head of Ifo surveys, told Reuters in an interview on Monday.

“The probability has increased that gross domestic product will also shrink in the second quarter,” he said.

China’s weaker than hoped for economic performance since its reopening from tight COVID-19 lockdowns, a looming U.S. recession and ongoing monetary policy tightening seem to be weighing on German company sentiment, said Carsten Brzeski, global head of macro at ING.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!

By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

“What is clear is that the optimism at the start of the year seems to have given way to more of a sense of reality,” Brzeski said.

The decline in Ifo is in line with the drop in the flash purchasing managers index, published on Friday. There was a combination of a slower rise in service sector business activity and a deepening downturn in manufacturing output, that report showed.

“The slump in the German Ifo, together with the drop in the PMIs, suggests that German GDP probably contracted for the third quarter in a row in the second quarter,” said Franziska Palmas, senior Europe economist at Capital Economics. The economic research firm expects the economy to remain in recession throughout 2023.

“We feel confirmed in our forecast that the German economy will shrink again in the second half of the year,” Commerzbank’s chief economist Joerg Kraemer said.

(Reporting by Maria Martinez, Editing by Friederike Heine, Matthias Williams and Hugh Lawson)


Recent Post: