Munich / Berlin (Reuters) – The decline in oil prices makes for increased optimism in the German economy.
The Ifo business climate index rose in December by 0.8 points to 105.5, as the Munich-based Ifo institute announced on Thursday his 7000 survey of managers. It was the second consecutive increase. Economists polled by Reuters had expected only 105.4 meters. “Falling oil prices and a declining euro exchange rate bring the German economy at Christmas time,” said Ifo President Hans-Werner Sinn. His institute increasingly sees positive signals for the economy. “The signs of a turnaround are increasing,” said Ifo expert Klaus Rabe well to Reuters.
In recent months, the oil price had dropped dramatically and had almost halved. This dampens the energy and production costs of many companies. In addition, it supports th e purchasing power of consumers, who must have substantially less on heating or refueling. “The fall in oil prices pushes the domestic demand more than the collapse of the Russian economy burdened exports,” said economist Holger Submitted by Nordea Bank. “The lower oil price will stimulate the demand at major German trading partners such as the US and France.”
The executives rated their position unchanged from the previous month, but looked more confident on future business. Optimistic showed mainly managers from the industry. “A supportive force remains the export,” said Ifo chief meaning. Also in wholesale, the mood brightened, while the business climate in the retail and construction became turbid respectively.
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The Ifo Institute expects this year and next each with an increase in economic power in Germany by 1.5 percent. The risk for the economy Experts see especially the recent turmoil in Russia. “The worsening crisis in recent days in Russia is likely to cause further uncertainty among German firms,” said KfW’s chief economist Joerg Zeuner. The sharp fall in oil prices, the Russian economy is set along with the sanctions of the West under pressure. The Fed pushed herself with a significant increase in interest rates against the decline of the ruble and the massive capital flight.
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