The mood in the German economy is the lowest for three years, which is also surprised by the analysts. They expected a decline in the economic climate index, but not so obvious. The researchers, with the participation of 9000 companies, were not only black and white but also in the future. After the fifth decline, the index is at its lowest level since February 2016.
The mood in the German economy deteriorated even further at the start of the new year. The Economic Index of Climate, calculated by the Munich Economic Research Institute Ifo, declined by 1.9 points compared to December to 99.1 points. After the fifth decline, the index is at its lowest level since February 2016.
Respondents not only assess the current economic situation but also the prospects for the next six months. Attitudes have worsened in all major sectors of the economy, both in commerce, service, construction and industry. "The economic climate deteriorated in all major industrial sectors, with the exception of the chemical industry– said the President of the Institute Io Clemens Fouest,
"The German economy is on track,"Fouest commented on the fall in the index," he said, "ifo significantly lowered its forecasts for Germany – the gross domestic product volume is expected to grow by only 1.1% this year, referring to the problems of the local automotive industry in confirming new European standards for exhaust and car costs, as well as uncertainty, such as Brazilian and US trade policy.
Analysts, however, expect a fall in the index, but only 100.7 points, so such a significant drop is a significant surprise. In December the Ifo index dropped by one point to 101 points.
Like every month, around 9,000 German companies took part.
The government intends to significantly reduce its forecast for economic growth in 2019. As it turned out today from circles close to the coalition, it plans to achieve economic growth of just one percent this year, while last year in the autumn Germany announced a 1.8% growth this year. Minister of Economy Peter Altmayer will present the new message on Wednesday.