As managers look past current issues to adopt a more hopeful perspective of the months ahead, German business confidence has increased for a fourth consecutive month, a carefully monitored survey revealed Wednesday.
According to the Ifo institute, its monthly confidence index increased from 90.1 to 91.1 points in February. Since their assessment of the current situation somewhat worsened, that was fully attributable to a clear improvement in the companies’ forecast for the upcoming six months.
Even if the confidence level has increased since November, it is still far below the 98.6 level it reached in February of last year, just before Russia began its full-scale invasion of Ukraine.
According to Ifo, “the German economy is gradually emerging from a period of weakness.” The largest economy in Europe contracted by 0.2% in the fourth quarter of 2017 compared to the same three-month period the year before, primarily due to a drop in consumer expenditure.
Over 9,000 businesses representing a diverse variety of industries provided replies for the Ifo survey.
According to Timo Klein, principal economist at S&P Global Market Intelligence in Frankfurt, “Germany’s economy will only start to rebound during the second quarter” because the brighter outlook is still entirely dependent on hopes for the future.
But, he continued, “the broad-based nature of increasing expectations across all pertinent sectors reassures that economic activity will definitely pick up in the near future, enabled by diminished concerns about energy security and costs.”
Like to other nations, Germany has been plagued with inflation lately. According to the Federal Statistical Office, the state assumed the cost of natural gas consumers’ monthly bills in December as part of a significant government energy relief package, causing the annual inflation rate to decrease to 8.1% in December before rising to 8.7% in January.
That was done in an effort to lessen the pain caused by the rise in natural gas prices that followed the invasion of the Ukraine and the cessation of Russian gas shipments to Germany.
Yet, there hasn’t been the expected scarcity of gas needed to run industries, heat homes, and produce electricity. Germany has opened its first liquefied natural gas ports, and its gas storage facilities are fully loaded.