Germany: Business confidence falls more than expected
May 24, 2012
In May, the business confidence indicator published by the Ifo Institute dropped to 106.9 points from 109.9 points in April. The decline exceeded market expectations, which had the index inching down to 109.4 points. The May result represents the first drop in business sentiment after the index recorded six consecutive monthly gains. According to the institute, the monthly drop revealed that firms showed less optimism about the current business situation, with the sub-indicator falling to its lowest level since July 2010. Moreover, respondents to the May survey also had a less optimistic assessment regarding their six-month business expectations, with the sub-index returning to levels seen in January. Owing to the monthly deterioration, the Institute acknowledged that the recent uncertainty in the Euro zone is impacting the German economy.
Author: Ricardo Aceves, Senior Economist