According to the survey based on responses from some 9,000 firms on Monday, German business confidence has fallen for a fifth consecutive month and reached its lowest level in seven years, adding to growing concerns that Europe’s biggest economy is about to sink into a recession.
The Ifo institute said its monthly confidence index declined to 94.3 points in August from 95.8 in July. Managers’ views of the current situation and the outlook for the next six months both worsened.
t was the lowest reading for the index since November 2012.
Ifo’s head, Clemens Fuest, said “there are ever more indications of a recession in Germany.”
The German economy contracted by 0.1pc in the April-June period and the country’s central bank, the Bundesbank, said last week it “could decline slightly” again in the summer.
Bundesbank President Jens Weidmann warned against excessive pessimism in a weekend newspaper interview, saying that he sees “no reason to panic.”
He noted that Germany is coming off a long upswing with healthy employment and said “the outlook is particularly uncertain at the moment,” citing political factors such as Brexit and international trade conflicts.
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13 November, 2019