German business confidence falls for fifth consecutive month
German business morale has deteriorated for the fifth straight month as government borrowing costs hit a 12-year high.
In another grim update for Europe’s largest economy, the Munich-based Ifo Institute think tank said its confidence index among German businesses fell again this month.
“The German economy is stagnant,” said Ifo president Clemens Fuest.
The report was released as the yield on German 10-year bonds – a key measure of the cost of borrowing – hit its highest level since 2011. Germany has been dubbed “Europe’s sick man” as years of Economic success gives way to stagnation and rejection.
It is expected to be the only G7 economy to contract this year.
Tough times: Munich-based think tank Ifo Institute said its confidence index among German businesses fell again this month
The German economy is at risk of falling into its second recession in a year. Production fell in the last quarter of 2022 and the first quarter of 2023.
It then stalled in the second quarter of the year – meaning the first recession was over – but is expected to contract again in the third and fourth quarters. A double-dip recession in Germany would be a blow to the broader eurozone, which is reeling after the Covid-19 pandemic and the invasion of Ukraine.
Carsten Brzeski of ING Research said: “German companies, as well as politicians and the entire economy, are slowly getting used to the idea that a longer period of moderate growth awaits the economy.”