German business sentiment falls in December – Ifo


© Reuters. FILE PHOTO: People walk past a construction site with cranes at Alexanderplatz in Berlin, Germany October 2, 2023. REUTERS/Annegret Hilse/File Photo

By Maria Martinez

BERLIN (Reuters) -German business morale unexpectedly worsened in December, the Ifo institute said on Monday after its latest survey also showed a decline in both expectations and current conditions.

The Ifo institute said its business climate index stood at 86.4 versus the 87.8 forecasts by analysts in a Reuters poll, following a revised reading of 87.2 in November.

“As the year draws to a close, the German economy remains weak,” Ifo president Clemens Fuest said.

Companies were less satisfied with their current business, with the current situation index falling to 88.5 from 89.4 in November.

They were also more sceptical about the first half of 2024, with the expectations component showing a decline to 84.3 in December from 85.1 in the previous month.

The German economy has a demand problem, Ifo’s head of surveys, Klaus Wohlrabe, told Reuters.

He also noted that the data point to a slight contraction in gross domestic product in the fourth quarter.

The German economy already contracted in the third quarter. Two consecutive quarters of negative growth are considered a technical recession.

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