Link Securities | Germany’s business climate index, compiled by the IFO institute, fell to 87.7 points in September from 88.9 points in August, significantly below the 89.2 points expected by FactSet analysts.
September’s reading is the lowest for this index since last May. It also represents the sharpest monthly decline in the last 12 months, reflecting growing pessimism among German companies.In September, the sub-index reflecting German companies’ expectations fell to 89.7 points from 91.4 points in August, also below the 91.8 points expected by the consensus.
Finally, the sub-index measuring German companies’ perception of the current situation also fell in September, in this case to 85.7 points from 86.4 points in August, below the 86.4 points projected by analysts. This suggests that uncertainty surrounding US tariff policy has affected confidence, clouding the outlook for Europe’s largest economy.
According to IFO analysts, the September readings indicate that Germany’s economic recovery prospects have suffered a setback.
