Latest news with #ifo
The Star
4 days ago
- Business
- The Star
German business sentiment rises, but recovery faces external threats
BERLIN, July 25 (Xinhua) -- Germany's business confidence rose in July to its highest level in over a year, a survey showed Friday. However, economists cautioned that the recovery remains fragile amid persistent external headwinds, including the U.S. tariffs threat. The ifo Business Climate Index, based on a survey of around 9,000 companies, edged up to 88.6 in July from 88.4 in June, marking the seventh consecutive month of improvement. While firms expressed a more favorable view of current business conditions, their expectations for the months ahead remained subdued. Sentiment in the manufacturing sector improved slightly but stayed at relatively low levels. The ifo Institute reported that industrial capacity utilization rose from 70 percent to 77.2 percent, though this still reflects below-average levels amid weak incoming orders. In contrast, the services sector posted a decline, driven in part by a significant deterioration in expectations among IT service providers. Analysts said the downturn may be linked to heightened uncertainty, as the European Union considers retaliatory measures including tariffs or regulatory actions against U.S. technology and digital firms in response to proposed trade actions by Washington. "Companies were slightly more satisfied with current business, but their expectations remained largely unchanged," said ifo President Clemens Fuest. "The upturn in the German economy remains sluggish." Carsten Brzeski, global head of macro at ING Research, described the mood as a "wave of optimism" but warned that the outlook is clouded by trade tensions, a stronger euro, and the threat of U.S. tariffs -- all factors that could weigh on Germany's export-driven economy. A separate ifo survey published Thursday underscored growing concern among German manufacturers. More than 60 percent of 1,500 companies surveyed reported being negatively impacted by the U.S. tariffs, which are set to take effect on Aug. 1 with duties of 30 percent. One-third of respondents said they expect the U.S. market to lose importance by the end of President Donald Trump's term. Trade tensions are already shaping investment decisions: around 30 percent of companies said they had postponed their U.S. expansion plans, while 15 percent had canceled them altogether. Despite the external pressures, Brzeski noted that German companies are increasingly turning their attention to opportunities under the new government's economic agenda. Earlier this week, the German government, in collaboration with major corporations, launched a sweeping investment plan at a business summit in Berlin. Valued at 631 billion euros (739 billion U.S. dollars), the initiative aims to revive Europe's largest economy through 2028, focusing on manufacturing, research and development, and infrastructure construction. (1 euro = 1.17 U.S. dollar)
The Star
25-06-2025
- Business
- The Star
Germany's export outlook worsens amid U.S. tariff concerns: ifo
BERLIN, June 25 (Xinhua) -- Export expectations among German manufacturers deteriorated in June as U.S. tariff policies continued to weigh on sentiment across key industries, a survey by the ifo Institute showed on Wednesday. The ifo Export Expectations index fell to -3.9 points in June from -3.0 in the previous month, signaling an overall decline in confidence within Germany's export-driven economy. The apparel sector reported the bleakest outlook, while sentiment also weakened significantly among food and beverage producers, automakers, and metal product manufacturers. Germany's automotive sector, a cornerstone of its industrial base, has faced persistently weak export expectations and remains especially exposed to trade tensions. The United States has already imposed a 25-percent tariff on cars and car parts imported from the European Union (EU). "The tariff threats from the U.S. are still on the table. An agreement between the EU and the U.S. has yet to be reached," said Klaus Wohlrabe, head of surveys at ifo. "This uncertainty is lowering exporters' expectations." Latest data from the Federal Statistical Office showed that German exports dropped by 1.7 percent month-on-month in April, while shipments to the United States, Germany's largest export market, fell sharply by 10.5 percent.
Fibre2Fashion
25-06-2025
- Business
- Fibre2Fashion
Germany's business climate hits 12-month high in June 2025: ifo
Business sentiment in Germany showed signs of improvement in June 2025, with the Business Climate Index rising to 88.4 from 87.5 in May—its highest level since June 2024, according to the ifo Institute. This reflects growing optimism, particularly in future expectations, which climbed to 90.7 from 89, continuing an upward trend since February. The assessment of the current situation remained largely stable, edging up to 86.2 from 86.1. Germany's business sentiment improved in June 2025, with the ifo Business Climate Index rising to 88.4â€'its highest since June 2024. Expectations climbed to 90.7, while current assessments remained stable. Manufacturing showed stabilisation despite weak order books. Trade sentiment improved, led by wholesale gains. The climate balance rose to -6.7, indicating cautious optimism. In manufacturing, sentiment stabilised, with companies expressing greater optimism about the months ahead despite continued dissatisfaction with order books and weaker current performance, ifo said on its website. In the trade sector, conditions improved as traders reported better business and a less pessimistic outlook. Wholesale trade led the recovery, though retail sentiment dipped slightly. The overall ifo business climate balance improved to -6.7 from -8.7 in May, marking the best reading since mid-2024. Manufacturing sentiment held at -13.7, steadying after a long decline, while the trade sector rose to -19.2 from -20.3. Though still below pre-2024 levels, the data points to a cautiously improving economic outlook in Germany. Fibre2Fashion News Desk (SG)
Fibre2Fashion
14-06-2025
- Business
- Fibre2Fashion
Stagnation expected in Germany in Q2 2025: ifo Institute
Germany is not expected to maintain the economic recovery momentum seen in the first quarter (Q1) of 2025 for the remainder of the year, according to the ifo Institute for Economic Research. Stagnation is expected in Q2 2025 as there was a noticeable decline in industrial production and exports in April due to the pull-forward effects. Average quarterly gross domestic product (GDP) growth will increase to 0.4 per cent in 2026, meaning that the underutilisation of overall economic capacity will gradually decrease and the German economy will enter a recovery phase. Germany's economic recovery momentum of Q1 2025 cannot be maintained over the rest of the year, the ifo Institute for Economic Research has said. Stagnation is expected in Q2 2025 as there was a noticeable decline in industrial production and exports in April. Price-adjusted GDP will rise by 0.3 per cent in 2025 and by 1.5 per cent in 2026. However, the outlook remains cautiously positive. Overall, price-adjusted GDP will rise by 0.3 per cent in 2025 and by 1.5 per cent in 2026. Compared to the spring 2025 forecast, the growth rates have thus been raised by 0.1 and 0.7 percentage points respectively. The revision is mainly due to the additional fiscal stimuli, which will increase real GDP by around €25 billion in 2026, the institute said in its 'Economic Forecast Summer 2025'. However, the outlook remains cautiously positive, thanks to the improved order situation and optimistic sentiment indicators. The increasing optimism is probably also due to hopes for a reboot of economic policy with the new German government and progress in the trade conflict with the United States. The forecast assumes that there will be no further changes to US trade policy. Nevertheless, the tariff increases on EU imports that have already come into force are weighing on export business. According to model calculations, they will dampen German GDP growth by 0.1 percentage points in 2025 and by 0.3 percentage points in 2026, ifo said in a release citing the forecast report. In Q1 2025, the German economy saw a strong growth of 0.4 per cent quarter on quarter. Around half of this increase was due to exports to the United States being brought forward in response to anticipated US tariff increases. Private consumption and investment activity did, however, also contribute to the positive trend. Numerous indicators suggest that the crisis in the German economy reached its low point in the winter half-year of 2024-25. Private consumption has been developing positively for four quarters, and the trend is accelerating. The gains in purchasing power resulting from the increase in real incomes are increasingly being spent and no longer saved. German government consumption and investment expenditure as well as corporate investment are likely to increase noticeably, particularly in the coming year. There are also initial positive signs on the labour market. A slight upturn in employment is expected in the coming months in line with the gradual recovery. However, a strong acceleration in employment growth will remain limited due to demographic trends—the number of people of working age will fall from 2025, the institute said. After a decline of 26,000 in 2025, the number of people in employment will increase by around 121,000 in 2026. Registered unemployment is expected to rise by 161,000 in 2025 and then fall by 63,000 in 2026. The unemployment rate in 2025 and 2026 will therefore be 6.3 per cent and 6.1 per cent respectively, the institute added. Fibre2Fashion News Desk (DS)
Yahoo
12-06-2025
- Business
- Yahoo
German economy to grow by 1.5% in 2026, leading institute projects
Germany's struggling economy is set to grow by 1.5% in 2026, according to a leading economic think tank, which almost doubled its previous forecast in a sign of possible relief following a three-year crisis. Researchers at the Munich-based ifo Institute for Economic Research had previously expected gross domestic product (GDP) to increase by 0.8% in 2026, almost doubling their estimates in their latest forecast published Thursday. The institute also slightly revised its growth forecast for 2025 from 0.2% to 0.3%. "The crisis in the German economy reached its lowest point in the winter half-year," senior ifo economist Timo Wollmershäuser, citing planned government measures to boost the economy as a reason for the improved projections. Germany's new Cabinet passed a package of tax relief measures to boost business investment last week, with companies to be given extended options to write off machinery and electric vehicles for the next three years. From 2028, corporation tax will be gradually reduced from 15% to 10% by 2032. The government has also pushed through major constitutional changes to enable massive debt-financed spending on defence, infrastructure and climate protection. According to the ifo experts, the economic effect of the planned expenditure, tax cuts and investments will amount to €10 billion ($11.5 billion) this year and €57 billion in 2026. However, the improved forecast is partially based on the premise that the European Union is able to resolve the trade conflict with US President Donald Trump, who has threatened to impose 50% tariffs on imports from the bloc from July 9 if no agreement is reached. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
