Men working at an office building in Munich, southern Germany.
Berlin: German business morale rose in December, hitting its highest level since February 2014 and supporting expectations that Europe’s largest economy will rebound in the fourth quarter.
The upbeat reading was welcomed by economists as a sign of economic resilience in the face of uncertainties that are clouding the outlook for Germany, including Britain’s decision to leave the European Union, unpredictable US policy under president-elect Donald Trump, and financial concerns over Greece and Italy.
The Munich-based Ifo economic institute said yesterday that its business climate index, based on a monthly survey of some 7,000 firms, rose to 111.0 after from 110.4 in November.
“The German economy is making a strong finish to the year,” Ifo chief Clemens Fuest said in a statement. He added that both the manufacturing and wholesaling indices rose and manufacturers were planning to ramp up production in the months ahead. The upbeat reading came after Ifo said on Friday the German economy will rebound more strongly than previously expected in the fourth quarter and this growth momentum will carry through into 2017.
ING economist Carsten Brzeski said growth next year will be weaker than in 2016, as the three main economic drivers - construction, consumption and government spending - will lose momentum because interest rates are unlikely to drop further, inflation will edge up and the unemployment rate stagnate.
