German business sentiment rises in March, Ifo says

By Thomson Reuters Mar 22, 2024 | 4:26 AM

By Maria Martinez

BERLIN (Reuters) -German business morale improved in March and beat expectations, a survey showed on Friday, though probably not enough to prevent Europe’s biggest economy from slipping into another recession.

The Ifo institute said its business climate index stood at 87.8 compared with a reading of 86.0 forecast by analysts in a Reuters poll.

“The German economy glimpses light on the horizon,” said Ifo president Clemens Fuest.

Companies’ expectations turned much less pessimistic in March and assessments of the current business situation also improved, the survey showed.

“The strong gain in the Ifo business climate gives us hope,” said Joerg Kraemer, chief economist at Commerzbank.

He said the dampening effect of massive increases in interest rates and energy prices is beginning to fade.

“However, an end to the recession in the summer half-year should not be confused with a genuine upturn,” Kraemer warned.

Germany is broadly expected to enter another technical recession in the first quarter of this year, after its economy shrank by 0.3% in the final quarter of last year.

(Reporting by Maria Martinez, writing by Rachel More; editing by Matthias Williams)