German business confidence unexpectedly worsened in January, falling for the second straight month, at a time when Europe’s largest economy is trying to avoid a recession and a brief period of optimism is giving way to expectations that another one will come. weak year. The Ifo institute said the business climate index fell to 85.2 from 86.3 in December. Reuters pollsters had expected the index to improve to 86.7 in January. “The German economy is stuck in recession,” said Ifo president Clemens Fuest. Germany’s gross domestic product (GDP) fell 0.3% in 2023. “The attempt to revive optimism last autumn (in the Northern Hemisphere) was short-lived,” said Carsten Brzeski, an economist at ING, predicting another -0.3% recession in 2024.
Last year the German economic scenario was influenced by inflation, rising energy prices and weakening external demand. There was still a fiscal problem that led to major benefit cuts and shook the unstable coalition governing Germany.
Farmer protests and strikes in the railway sector also occurred earlier this year, with growing discontent with Chancellor Olaf Scholz’s economic policy.
On Wednesday, the Ifo revised down its growth expectations for 2024, with an expected recovery of just 0.7% this year.
To further highlight local economic difficulties, particularly in the real estate sector, data released this Thursday showed that construction purchases fell 7.4% in November in a monthly comparison.
Source: Terra
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