Summary: ifo business climate index up in February; higher than expected figure; ifo president describes German economy as “robust”; index still implies negative euro-zone GDP growth.
Following a recession in 2009/2010, the ifo Institute’s business climate index largely ignored the European debt-crisis of 2010-2012, remaining at average-to-elevated levels through to early-2020. However, the index was quick to react in the March 2020 survey, falling precipitously. The rebound which began in May was almost as sharp but subsequent readings have not continued this trend.
According to the latest figures released by the Institute, its business climate index increased to 92.4 in February, continuing a run of readings near 90. The reading was above the expected reading of 89.7 and 2.1 points above January’s final reading of 90.3. The average reading since January 2005 is just below 97.
The expectations index also increased, rising from January’s revised figure of 91.5 to 94.2, also above the generally-expected figure of 91.7. The current situation index rose from 89.2 to 90.6.
“Assessments of the current business situation were more positive. Moreover, pessimism regarding the coming months was markedly reduced. The German economy is proving robust despite the lockdown, especially thanks to strength in industry,” said Clemens Fuest, the president of the ifo Institute.
