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    IFO index rises minimally – “no trend reversal”

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    Mood in executive suites depressed
    IFO index rises minimally – “no trend reversal”

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    At least: The IFO index is no longer falling. However, there is stagnation at a low level with a vaguely positive trend. However, feelings of crisis still prevail in the boardrooms of German companies.

    The mood in the executive suites of German business brightened slightly in February. The IFO business climate rose to 85.5 points from 85.2 points in the previous month, as the Munich IFO Institute announced in its survey of around 9,000 managers. The companies assessed their current business situation as before, but their prospects for the coming months were slightly better than in January. “The economy is stabilizing at a low level,” said IFO President Clemens Fuest. It is easy to interpret positively that another crash could be avoided.

    Experts had expected such a development in the IFO index. This shows “that the mood in the German executive suites remains depressed. Unfortunately, there is still no upward signal in Germany, although the mood in industry in many other countries has recovered somewhat in the last few months,” said the chief economist at Commerzbank, Jörg Krämer.

    Ralf Umflauf from Helaba also sees “no sustainable trend reversal” in the slightly increased value: “The increase in business expectations is pleasing, with the scenario of a gradual economic bottoming out being maintained. However, the expectations of interest rate cuts will probably not be significantly dampened.”

    The economy is currently on the verge of recession due to falling investment. The gross domestic product (GDP) shrank by 0.3 percent from October to December 2023 compared to the previous quarter. “In the final quarter, declining investment slowed down the economy, while consumption increased slightly,” said the President of the Federal Statistical Office, Ruth Brand. The federal government only expects meager growth of 0.2 percent for the current year.

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