German business confidence fell sharply this month, the Ifo economic research institute said on Wednesday as it released the latest in a series of bleak indicators for the eurozone’s economy.The monthly Ifo business climate index plunged to 108.7 points from 112.9 points in July, underscoring a sharp slowdown seen also in eurozone consumer confidence.German business expectations for the coming six months showed a sharp drop as well, a development noted with particular concern by analysts.
The latest Ifo poll was well below expectations of a decline to 111 points and was the biggest drop since the index lost 4.9 points in November 2008.
It was also the measure’s lowest level since June 2010 and marked a very sharp fall from the record high of 115.4 in February as the German economy, the eurozone’s biggest, bounced back from its worst post war recession.“Turbulence in the financial and foreign exchange markets, the sovereign debt crises in certain eurozone countries and the development of the US economy have contributed to uncertainty,” Economy Minister Philipp Roesler said in a statement. An Ifo sub-index that measures companies’ expectations for the next six months fell to 100.1 points meanwhile from 105. A figure below 100 indicates a downturn and it was the expectations’ lowest level since October 2009.
UniCredit counterpart Andreas Rees noted it was also the indicator’s sixth consecutive decline and added: “There can absolutely be no denying that this is a downward trend.” An Ifo statement quoted president Hans-Werner Sinn as saying: “The current business situation, however, continues to be assessed overall as good, although the situation appraisals in recent months were significantly more favourable.” The survey of around 7,000 firms showed falls in all of its categories - manufacturing, retailing and construction, and backed up an EU Commission survey of consumer confidence released on Tuesday.
That poll’s fall of 5.4 points to minus 16.6 points was a sharper drop than one seen in October 2008 after US investment bank Lehman Brothers collapsed, setting off the global financial crisis and recession.
From / Gulf Today