Dark prospects for the German economy

The German business climate is the worst since February and the recovery in Europe's largest economy has stalled, shows a monthly index from the German analysis institute Ifo. "A crisis situation", says the Ifo chief in a comment.

» Updated:

» Published:

Dark prospects for the German economy
Photo: Martin Meissner AP/TT

Share this article

Confidence in the future sank according to Ifo to 86.8 in August, down from revised 87.0 the previous month. The decline was certainly somewhat smaller than expected, but it comes with a sub-index for the view of the current situation in the German economy, which is also falling.

"The German economy is increasingly falling into a crisis situation," says Ifo chief Clemens Fuest according to a press release.

Expectations for economic development are pointing downwards both in the service sector and in manufacturing, according to Ifo's measurements.

The German economy contracted by 0.1 percent during the second quarter, and the so-called purchasing managers' index for August remained below the 50-line, indicating decreased activity in the economy.

An index from the Zew Institute fell earlier in August to its lowest level since January, and the German central bank Bundesbank – part of the European Central Bank (ECB) – has warned of persistent weak development for manufacturing as the German industry is currently in a tough competitive situation.

The ECB has flagged that the key interest rate in the eurozone may be lowered in September following the cut in June.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

China Investigates Nvidia for Competition Law Violations

China Investigates Nvidia for Competition Law Violations

USA and China Near Resolution on TikTok Deal

USA and China Near Resolution on TikTok Deal

Black Soldier Fly Oil and Protein Developed for Animal Feed

Black Soldier Fly Oil and Protein Developed for Animal Feed

Basmati Rice Dispute Stalls EU-India Trade Agreement

Basmati Rice Dispute Stalls EU-India Trade Agreement

Stock Market and Krona Rise as Week Begins

Stock Market and Krona Rise as Week Begins

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Sweden Construction Costs Rise 0.4% in August Amid Higher Electricity Prices

Swedes Report Decreased Satisfaction with Banks This Year

Swedes Report Decreased Satisfaction with Banks This Year

Fashion Trade Sales Rise for Third Consecutive Month

Fashion Trade Sales Rise for Third Consecutive Month

Powell's Rate Signal Influences Swedish Households Too

Powell's Rate Signal Influences Swedish Households Too

Asian Markets Rise Despite Weak China Data

Asian Markets Rise Despite Weak China Data

ANZ Bank Faces Record Fines for Bond Deal Misconduct

ANZ Bank Faces Record Fines for Bond Deal Misconduct

Trump Welcomes Foreign Investment and Workforce in the USA

Trump Welcomes Foreign Investment and Workforce in the USA

Government Boosts Support for Sweden's Regional Airports

Government Boosts Support for Sweden's Regional Airports

Klarna CEO: Embracing "Swedishness" as a Key Asset

Klarna CEO: Embracing "Swedishness" as a Key Asset

Handelsbanken Swish Payment Disruption Resolved

Handelsbanken Swish Payment Disruption Resolved

Government Proposes Increased Export Credit Guarantees for Swedish Companies

Government Proposes Increased Export Credit Guarantees for Swedish Companies

AstraZeneca Halts UK Research Facility Expansion Plans

AstraZeneca Halts UK Research Facility Expansion Plans

Princess Madeleine's Skincare Brand Launch Draws Lukewarm Interest

Princess Madeleine's Skincare Brand Launch Draws Lukewarm Interest

Länsförsäkringar Swish Payment Issue Resolved

Länsförsäkringar Swish Payment Issue Resolved

Blind Box Trend Raises Concerns Over Consumer Behavior and Spending

Blind Box Trend Raises Concerns Over Consumer Behavior and Spending