The IFO Institute reported an unexpected decline in German business morale for December. Their latest survey indicated a drop in both expectations and current conditions.
The Ifo Institute said its business climate index stood at 86.4, versus 87.8 forecast by analysts in a Reuters poll, after a revised reading of 87.2 in November.
“As the year draws to a close, the German economy continues to show a weak trend,” said IFO President Clemens Fuest.
Businesses expressed decreased satisfaction with their present operations, as indicated by a drop in the current situation index from 89.4 in November to 88.5.
They were also more skeptical about the first half of 2024, with the expectations component showing a decline to 84.3 in December from 85.1 the previous month.
Germany’s economy has a problem with demand, Klaus Wohlrabe, head of Ifo research, told Reuters.
He also noted that the data showed a slight decline in gross domestic product in the fourth quarter.
In the third quarter, the German economy has already experienced a contraction. Two consecutive quarters of negative growth is considered a technical recession.
Comments on “German Business Sentiment Declines in December”