By Marco Babic
ZURICH (MaceNews) – Business sentiment in Germany improved by a record amount in June, with current conditions and the expectations components rising in tandem, Ifo Institute reported Wednesday.
The IFO Institute business sentiment index rose by a record amount to 86.2 in June from a revised reading of 79.7 (79.5) in May. Current conditions and expectations rose together for the first time since December of last year, with the current index improving to 81.3 from 78.9 and expectations improving to 91.4 from a revised 80.5 (80.1) the previous month.
Ifo noted that among the major sectors of the economy, manufacturing, services, trade and construction, there was an overall improvement in sentiment. Overall it shows that “German business sees light at the end of the tunnel,” Ifo said.
This sentiment was underscored in a speech by Bundesbank President Jens Weidmann, who said on June 22 that even though the Germany’s economy has “plunged into a sharp recession,” there are some positive developments.
“The good news, then, is that the German economy probably bottomed out in April and has been growing again, as the pandemic has been contained and the measures were partially lifted in May. However, substantial restrictions persist, and the dampening economic impact is waning only gradually,” Weidmann said.
“Hence, our experts foresee a painfully slow recovery, when measured against the sudden slump we have witnessed. Economic activity is expected to return to its pre-crisis level only towards the end of 2022, in our baseline projection,” Weidmann said. (For a full English text of the speech see the link at the end of this story) Wednesday’s report follows the ZEW report which also showed overall improvement driven by improved current conditions and expectations.
Ifo July business sentiment will be released on July 27 at 10:00 CET.
https://www.bundesbank.de/en/press/speeches/the-current-crisis-and-the-challenges-it-poses-for-economic-and-monetary-policy-835164