The economic barometer drops to 90.1 points in January
Because of the worsening virus pandemic, the mood among companies in Germany has deteriorated at the beginning of the year. “The second corona wave temporarily ended the recovery of the German economy,” said Ifo President Clemens Fuest on Monday about his institute's survey of 9,000 managers. The Ifo business climate index fell in January from 92.2 points in the previous month to 90.1 points.
Economists had only expected a slight decrease to 91.8 points. The managers judged the outlook for their businesses and their situation to be less favorable than recently. The uncertainty in the economy has increased, “also because the vaccinations are likely to drag on,” said Ifo economic expert Klaus Wohlrabe in a Reuters interview. “Something disillusioned has moved in here.”
In economic terms, there is a risk of a false start to the year in view of the extended corona lockdown. “We expect stagnation in the first quarter,” said Wohlrabe. According to estimates by the Federal Statistical Office, Europe's largest economy is likely to have stood still by the end of 2020. “The German economy is starting the year with little confidence,” said Wohlrabe.
Industry prevented a stronger decline. “It is still very well positioned,” said Wohlrabe. “It wants to produce more, and its export expectations have also risen.” The electrical industry and machine builders in particular are currently doing well. “What has slumped massively is the retail trade,” said Wohlrabe.
