The mood in the German economy surprisingly deteriorated at the beginning of the year. As reported by the Munich Ifo Institute on Monday, the business climate it recorded fell in January by 0.4 points to 95.9 points. By contrast, analysts had expected growth. On average, an increase to 97.0 points was expected.
“The German economy is starting the new year with some restraint,” commented Ifo President Clemens Fuest. The company’s mood was burdened by expectations for the next six months. In contrast, the assessment of the current situation brightened slightly.
UWE BURKERT, CHEFVOLKSWIRT LBBW:
“A big surprise. We had expected an improvement in expectations, because with the ‘hard Brexit’ and the compromise signals in the trade dispute two stress factors have been eliminated. Now things have turned out differently. Apparently the weakness of the industry has also reached the service providers with a time lag One can only hope that the recovery of the industry, which we can now see from the data, will also arrive there. All in all, it shows that we are facing a difficult year. “
The Bundesbank is now seeing signs of an end to the downturn in German industry. The central bank assumes that overall economic output will largely stagnate at the end of 2019, after mini-growth of 0.1 percent in the third quarter.
The markets, which are already worried about the corona virus that has broken out in China, have continued to slide. The Dax is currently 1.75 percent in the red and is again far from its record high with 13,340 points.
(Onvista / AFX / Reuters)
Cover photo: H-AB / Shutterstock.com
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