The confidence of German companies in the economy has fallen for four months

Business confidence in the German economy worsened for the fourth time in a row in August.

The Munich-based Institute for Economic Research (Ifo) published the results of the August German Business Survey, in which approximately 9,000 companies participated.

Consequently, the ifo index of confidence in the business environment in Germany, which last month was 87.4 points, decreased to 85.7 points in August due to the sharp deterioration in the future expectations of company executives, with which decreased for the fourth consecutive month. The market expectation was that the index would drop to 86.7 points.

It should be noted that the Ifo expectations index in Germany decreased from 83.6 to 82.6 points in August, while the current situation index decreased from 91.4 to 89 points. It is also worth noting that the corporate world’s assessments of the current situation fell to their lowest level since August 2020.

EXPECTATIONS HAVE WORSE

The Ifo survey stated that expectations for the future of the manufacturing and service sectors worsened.

The president of Ifo, Clemens Fuest, in his assessment on the subject stated that the expectations of companies for the future are increasingly pessimistic and used the expression “The German economy has not yet reached the level”.

According to data from the Federal Statistical Office (Destatis), the German economy, the largest in Europe and the fourth in the world, contracted 0.4 percent in the last quarter and 0.1 percent in the first quarter of the year. year, but failed to grow in the second quarter of the year.

While many crises such as the Covid-19 epidemic, supply chain disruptions, and the war between Russia and Ukraine in recent years have brought weaknesses in the German economy to the surface, the fact that many countries, especially China, can produce more and more Imported goods from Germany and interest rates rise with high inflation, making it difficult for the German economy to continue growing.

Slowing global growth, falling industrial production and consumer efforts to cope with rising inflation are also negatively affecting the German economy. (AA)