German business confidence fell for a fourth straight month in August as the sovereign debt crisis curbed growth in Europe’s largest economy.
The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, dropped to 102.3 from 103.2 in July. That’s the lowest reading since March 2010.
German economic growth slowed to 0.3 per cent in the second quarter from 0.5 per cent in the first as the debt crisis damped demand for exports and prompted companies to postpone investments.
While sales to faster-growing markets outside Europe and domestic spending are helping to insulate Germany from the turmoil, the Bundesbank said last week that the prevailing uncertainty may cause the economy to cool further.
“Recent economic data are not encouraging,” said Jens- Oliver Niklasch, an economist at Landesbank Baden-Wuerttemberg in Stuttgart.
“The construction industry as well as the export industry will see a slowdown in the months to come.”
Ifo’s gauge of the current situation eased to 111.2 from 111.5 in July, while a measure of executives’ expectations fell to 94.2, the lowest since June 2009, from 95.5.
The euro rose after the report to trade at $1.2523 at 11 am in Frankfurt, up 0.1 per cent today.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Dean Popplewell
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.
Latest posts by Dean Popplewell (see all)
- Euro zone bond yields sink as German manufacturing slows - 24 July 2019
- How Boris Johnson Plans to Deliver Brexit in 100 Days - 24 July 2019
- Weak PMI’s Sink EUR - 24 July 2019