Ifo-Test suggests economy is bottoming out
While the business climate in industry deteriorated slightly in February, it has shown a surprising recovery in the services sector. Particularly encouraging is the fact that business expectations, deemed to be a reliable leading indicator, have now improved for the second time in succession in nearly all major sectors. In retail, the business climate has now moved up for the third time in a row.
This glimmer of hope on the economic horizon should not hide the fact that the German economy has been in an exceptionally deep recession since the beginning of 2009. In the first quarter of 2009 gross domestic product is likely to be ½ - 1% down on the previous quarter and 4% down on a year earlier. For this reason alone, the assessment of the economic situation in companies is very negative. Nor are business expectations likely to continuously edge their way up in coming months either. Given the problems facing the financial system which will take time to solve, the path ahead will be bumpy. Nonetheless, the latest Ifo survey nurtures hopes that we will be spared any economic horror scenarios.
Dr. Rolf Schneider
Tel.: 49 / 69 / 2 63 – 5 77 90
e-mail: rolf.schneider@allianz.com
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