According to a survey released on Wednesday, business sentiment in Germany rose in January as the biggest economy in Europe got off to a better start with lower prices and more optimistic prospects.
According to the Ifo institute, the business climate index increased to 90.2 from 88.6 in December, which is higher than the previous estimate of 88.6 and in line with the consensus of economists polled by Reuters.
According to Ifo’s president Clemens Fuest, “the German economy is entering the new year with more confidence.”
Ifo stated that although companies were somewhat less satisfied with their existing status, the gain was caused by much less negative predictions.
Ifo economist Klaus Wohlrabe predicted that while a recession is unlikely, the GDP may contract somewhat in the first quarter.
Ifo’s growth is consistent with the upbeat signals provided by other economic indicators, such as the German consumer sentiment, which is expected to continue its upward trend in February, or the German flash composite Purchasing Managers’ Index, which increased for the third straight month in January.