Germany: Business confidence jumps to highest level in 10 months
February 22, 2013
The business climate index published by the Ifo Institute climbed from a revised 104.3 points in January (previously reported: 104.2 points) to 107.4 points in February. The figure marks the fourth consecutive increase in sentiment and drives the index to its highest level since April 2012. The reading also overshot market expectations, which had the index rising to 105.0 points.
Business confidence improved in February underpinned by businesses' more optimistic assessment about both their current business situation as well as their future business prospects for the next six months. According to Ifo, "the German economy is regaining momentum".
Rising levels of business confidence bode well for investment going forward. Consensus Forecast panellists expect gross fixed investment to increase 0.5% in 2013, which is down 0.1 percentage points from last month's forecast. Next year, the panel sees investment growth accelerating to 3.5%.
Author: Ricardo Aceves, Senior Economist