2024-07-25 12:18:05
This is the third decline in a row. The mood in the German economy continues to decline.
The mood in the German economy has surprisingly deteriorated further in July. The Ifo business climate fell by 1.6 points to 87.0 points, as the Ifo Institute reported on Thursday in München It is the third consecutive decline in the most important German economic barometer. “The German economy is stuck in the crisis,” commented Ifo President Clemens Fuest.
Analysts were surprised by the development. They had expected an improvement in sentiment and had assumed an average of 89.0 points. The approximately 9,000 companies surveyed by the Ifo Institute rated the prospects for their future business significantly worse. The assessment of the current situation was also weaker than in the previous month.
The business climate in the manufacturing sector fell significantly. Here, the Ifo experts pointed to the weak incoming orders and a comparatively low capacity utilization. The values also fell in trade, the services sector and construction. In the construction industry, expectations are “characterized by clear pessimism,” said Fuest.
Dekabank’s chief economist, Ulrich Kater, sees the Ifo data as a “cold shower” for the economy. In his opinion, the uncertainty caused by the upcoming US presidential election has had a negative impact, among other things. However, there is still hope that the economic downturn will only be temporary.
“The valley of tears has not yet been crossed,” commented chief economist Thomas Gitzel of VP Bank. “The economic valley is more like a broad lowland, the extent of which is difficult to grasp.” According to Gitzel, the industrial-heavy German economy is lacking “external economic impulses.”