Germany’s business outlook showed a deterioration for the first time in five months, a sign that Europe’s largest economic system is facing various difficulties and obstacles on its way to recovery.
An expectations gauge by the Ifo Institute in June was fixed at 89. In this case, a noteworthy circumstance is that in previous months the mentioned indicator was 90.3. The June result contradicts analysts’ forecasts of an improvement in the state of affairs in the space of the German economic system. A measure of current conditions held steady.
Ifo President Clemens Fuest on Monday, June 24, during a conversation with media representatives, said that the June figure is evidence of regression. In this context, he also noted that there have been some improvements over the past months, but it seems that the positive dynamic has ended. Separately, Clemens Fuest underlined that the specified negative data also relate to the German manufacturing sector.
The deterioration of the business outlook reflects the difficulty of overcoming the economic downturn observed over the past few years. In the context of this problem, a factor of particular impact is the behavior of consumers, who are still subject to significant uncertainty associated with a lack of confidence in the future prospects of the economic dynamic, as part of their spending planning, despite such positive circumstances as a slowdown in the inflation process and income growth.
In the first quarter of the current year, Germany’s production output grew by 0.2% year-on-year. Last week, the Bundesbank said that the mentioned upward dynamic will continue in the short term.
As we have reported earlier, Germany to Help Its Tech Industry to Compete With Silicon Valley.
