A confidence of companies and Germany He improved unexpectedly in August, reaching his highest level in 15 months, showed a survey on Monday (25), although analysts warned that economic perspectives They are still weak.
The IFO Institute said its business climate rate increased to 89.0 in August, from 88.6 in July, the highest level since May last year. Analysts consulted by Reuters predicted a reading of 88.6.
“The improvement is not enough to create real growth expectations,” said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe. “Much is based on expectations for the future, whose realization is uncertain.”
The increase was due to the improvement of expectations between companies. However, the current situation was evaluated as slightly worse, said IFO.
“The recovery of the German economy is still weak,” said IFO President Clemens Fuest.
Germany’s economy shrunk 0.3% in the second quarter, further reducing the expectations of a sustained recovery of the largest economy in Europe this year.
Klaus Wohlraba, IFO’s head of research, expects weak growth in the third quarter, with an expansion of Gross domestic product only 0.1%.
He added that export expectations have worsened since the EU and the US closed a trade deal in late July, with a 15%basic fare.
As higher US tariffs are harming growth, while cuts in interest rates of the European Central Bank and billions in spending on infrastructure Promised by the German government, they will probably boost a moderate recovery, said Thomas Gitzel, chief economist at VP Bank.
