The Ifo business climate unexpectedly remains unchanged.
In Germany, there's an unexpected state of stagnation in the economy. The Ifo business climate held steadfast at 89.3 points in May, as reported by the Munich Ifo Institute in their survey of approximately 9,000 managers. Prior to this, the indicator had increased three times in a row.
Analysts predicted an uptick to 90.4 points, but that didn't occur. Businesses saw their current business circumstances more harshly than before, but their outlook for the future was brighter. "Germany's economy is gradually emerging from the crisis," remarked Ifo President Clemens Fuest.
The economy averted a recession at the start of the year with a boost from export growth and increased spending on construction projects. Growth levels reached 0.2% during the first quarter, marking the strongest since the previous year. The Bundesbank and other experts anticipate this recovery to extend into the present second quarter. To sustain momentum, private consumption would need to increase - especially with the decrease in inflation.
Considering the data, the overall growth of GDP (Gross Domestic Product) could reach 0.3%. Nevertheless, the German Industry and Trade Association (DIHK) forecasts a standstill, based on a survey involving more than 24,000 companies across various industries and regions.
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Despite the steady Ifo business climate, some businesses have taken a step-by-step approach to navigating the ongoing crisis, cautiously assessing their current circumstances and optimistic about the future. The German economic recovery, while not yet fully sustained, continues to show signs of growth, gradually emerging from the crisis as perceived by Ifo President Clemens Fuest.
Source: www.ntv.de
