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Ifo index rises unexpectedly - "glimmer of hope" at the start of the year

2022-01-25T10:15:57.609Z

Ifo index rises unexpectedly - "glimmer of hope" at the start of the year Created: 01/25/2022, 11:06 am The mood in the German economy brightened at the start of the year. (Archive/symbol image) © Robert Schlesinger/dpa-Zentralbild/dpa The business climate index of the Munich Ifo Institute has risen surprisingly. According to experts, however, it is still too early to speak of a trend reversal.



Ifo index rises unexpectedly - "glimmer of hope" at the start of the year

Created: 01/25/2022, 11:06 am

The mood in the German economy brightened at the start of the year.

(Archive/symbol image) © Robert Schlesinger/dpa-Zentralbild/dpa

The business climate index of the Munich Ifo Institute has risen surprisingly.

According to experts, however, it is still too early to speak of a trend reversal.

Munich - The mood among top managers in Germany has brightened at the start of the year for the first time since June.

The Ifo business climate index rose surprisingly to 95.7 points in January, after 94.8 points in December, as the Munich Ifo Institute* announced on Tuesday in its survey of around 9,000 executives.

Experts interviewed by Reuters, on the other hand, had only expected stagnation.

"The German economy is starting the new year with a glimmer of hope," said Ifo President Clemens Fuest.

The bosses again assessed the situation of their companies more skeptically than last time, but looked to the future much more optimistically.

Ifo economic expert: Still no trend reversal

In the manufacturing sector in particular, the mood made a significant leap upwards.

Companies were more satisfied with current business and assessed their prospects better again.

"The situation with the delivery bottlenecks for preliminary products and raw materials has eased somewhat." Ifo economic expert Klaus Wohlrabe warned of euphoria with a view to the overall economy.

“There are positive signals.

But it's still too early to speak of a trend reversal," he told the Reuters news agency.

Commerzbank chief economist Jörg Krämer emphasized that business expectations have risen significantly in all important sectors.

"Apparently, companies are increasingly looking through Omikron." Chief economist Alexander Krüger from the private bank Hauck Aufhäuser Lampe warned, however, of the negative effects of the geopolitical situation: "The Ukraine conflict has increased the risk that economic expectations will be disappointed."

Ifo Business Climate Index: Hope is burgeoning among service providers

For service providers, the Ifo business climate index rose again after three declines in a row.

"The pessimism about expectations has disappeared," said Ifo boss Fuest.

“The tourism industry is looking forward to the summer with hope.” However, the hospitality industry is currently still in crisis.

The mood also improved in trade and construction.

The German economy had probably shrunk somewhat at the end of 2021, by 0.5 to 1.0 percent according to an initial estimate by the Federal Statistical Office.

Most economists assume that the pandemic wave caused by the corona variant Omicron will also slow down the economy in the current first quarter.

Most recently, however, survey data from the IHS Markit institute among purchasing managers suggested that the economy, and above all industry in 2022, got off to an unexpectedly good start.

With the expected ebbing of the incidences, the economy should then recover noticeably from the spring.

For the full year 2022*, the federal government expects growth of 3.6 percent, as can be seen from the draft of the annual economic report, which Reuters reported on last week.

(rtr)#

*Merkur.de is an offer from IPPEN.MEDIA

Source: merkur

All news articles on 2022-01-25

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