German confidence bounces back again

Tim Wallace
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GERMAN businesses are increasingly confident about the state of the economy, the influential Ifo monitor showed yesterday.

The business climate index rose for the third consecutive month, to 106.7. The index is based at 100 in 2005. A period of sustained positive sentiment is important, with morale having been knocked by the crisis in Ukraine and the Eurozone’s issues.

Its manufacturing and wholesaling sub-indices rose, but the construction component dipped on the month. “The increasingly aggressive monetary policy response of the European Central Bank, which helped driving down the euro exchange rate, and cheap oil set Germany on course for a rapid return to trend growth rates by the second quarter of 2015,” said Berenberg Bank economist Christian Schulz.

“Export-dependent manufacturing, which benefits from a lower euro exchange rate, and retail trade, which should be seizing on consumers’ increased spending power due to cheap oil, improved most.”