Economy
Wednesday, September 24, 2014
Concerns about international crises continue to press on the mood in the German economy. The Ifo business climate index goes back again in September. That’s a steeper decline than expected. Experts make little hope of improvement.
The concerns about international political crises press more and more on the mood in the German economy. In September, the Ifo business climate index fell for the fifth time in a row after dropping from 106.3 to 104.7 points, such as the Ifo Institute for Economic Research in Munich announced. That’s the lowest level since April 2013
The decline was far more pronounced than expected. “The German economic engine is no longer running around,” said Ifo chief Hans-Werner Sinn. Economists had expected an average of only a decline of 0.5 points to 105.8. The company estimated in September both their current situation and their future prospects worse one. While the location index yielded 111.1 110.5 points, the expectations index fell from 101.7 to 99.3 points.
The Ifo index is the most important early indicator of the German economy. It is calculated monthly by the survey of about 7,000 companies. “The worse mood again is a warning sign,” said Joerg Zeuner, KfW Chief Economist. Even in the past few weeks corrected downward growth forecasts for Germany could yet prove to be too optimistic, the international environment should deteriorate further. After all, there are some glimmers of hope: How the conflict in eastern Ukraine have calmed down a bit
“The industrial safety net is thin”
Helaba analyst Ulrich Wortberg judged. “A revival of German economic activity is characterized in the coming months, not from. The emerging economic worries in Europe tend to be larger “. ING-Diba chief economist Carsten Brzeski sees the index decline as evidence that increasing monetary tensions and weakening emerging countries are the German export economy under pressure. “In addition, the industrial safety net of low inventories and abundant filled order books will slowly thin,” he said.
More aboutAlso on consumer sentiment hit the international trouble spots last through. For the first time in over one and a half years, the consumer sentiment of German citizens had deteriorated in August. Public confidence in an upbeat developments in the economy faded even as strong as yet in any other month since the survey began in 1980, the consumer confidence index fell by 8.9 points in August to 8.6 points for September.
The German economic output fell by 0.2 percent in the second quarter. For the third quarter, economists expect to see an increase in gross domestic product (GDP). However, the German export economy had put a new record last July. The continuing decline in leading indicators such as Ifo and PMI, however, suggests that the dynamics of the recovery will not be particularly high.
Source: n-tv.de
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