German business sentiment rises in June, Ifo says

[BERLIN] German business morale rose in June, a survey showed on Wednesday (Jun 24), with companies more positive about their current situation than they have been for nearly two years.

The Ifo institute said its business climate index increased to 85.6 compared with a revised 85.0 in May. The reading, which showed only a slight improvement in future expectations, was in line with a Reuters forecast.

“The German economy is hoping for an easing of the global political situation,” Ifo President Clemens Fuest said.

Business morale rose across all business sectors.

“Hope is back,” said Carsten Brzeski, global head of macro at ING. “However, before getting overly enthusiastic, even with today’s increase the Ifo index still remains below its pre-war level.”

The increase in the headline index was in line with expectations, said Robin Winkler, Germany chief economist at Deutsche Bank Research.

“What is striking, however, is that this was mainly due to a better assessment of the current situation,” Winkler said.

Businesses were more satisfied with their current operations, with the index rising to 87.0 from 86.1 in May.

The rise suggests that the impact of the US-Israeli war on Iran on activity is easing, said Harry Chambers, assistant economist at Capital Economics.

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The outlook for the coming months was also less pessimistic, Ifo said, with the corresponding index rising to 84.1 from 83.9 in the previous month. REUTERS