Business survey gives cause for optimism on German economy

Chris Papadopoullos
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A WIDELY followed German business confidence survey has suggested that the Eurozone’s biggest economy is set for stronger growth ahead after a disappointing growth figure was confirmed yesterday.

The German-based Institute for Economic Research (IFO) yesterday said its business climate index, derived from a survey of around 7,000 firms in services, manufacturing and construction, edged up to a score of 108.3 for August, up from July’s 108.

The strong survey suggests growth in Germany is unlikely to disappoint for long. Its economy grew 0.4 per cent from April to June, government statistics body Destatis said yesterday, in line with a previous flash estimate.

Exports were 2.2 per cent higher than the previous three months, while imports climbed just 0.8 per cent. The resulting trade surplus added 0.7 percentage points to growth.

“On the face of it, the index looks consistent with a pick-up in German annual GDP growth from the second quarter’s 1.6 per cent to about two per cent,” said Jennifer McKeown from Capital Economics.