Germany: Business confidence falls to 27-month low
June 22, 2012
In June, the business confidence indicator published by the Ifo Institute, dropped to 105.3 points from 106.9 points in May, which represented the lowest level since March 2010. That said, the fall was broadly in line with market expectations that had index declining to 105.6 points.
According to the Institute, the monthly drop revealed that although firms showed a somewhat brighter assessment of their current business situation compared to the previous month, their business expectations for the next six month deteriorated sharply over the previous month, with the corresponding sub-index returning to levels last seen in October 2011. Owing to the monthly deterioration, the Institute stated that "the German economy fears the growing impact of the euro crisis".
Author: Ricardo Aceves, Senior Economist