German business confidence down for second consecutive month

By: |
November 24, 2020 4:12 PM

Still, the decline was smaller than economists had predicted. And official data released separately on Tuesday showed that the economy performed a bit better in the third quarter than previously reported. The Ifo institute said that its business confidence index declined to 90.7 points from 92.5 a month earlier. Economists had forecast a drop to 90.2.

Ifo's survey is based on monthly responses from about 9,000 companies in various sectors.''We expect the September quarter growth to be at -7.8 per cent, better than -23.9 per cent in the June quarter. We also retain our previous forecast of -7.5 per cent growth in FY21,'' they said in a report on Wednesday.

Business confidence in Germany, Europe’s biggest economy, fell for a second consecutive month in November as a resurgence of coronavirus infections led to partial shutdowns across the continent, a closely watched survey showed Tuesday.

Still, the decline was smaller than economists had predicted. And official data released separately on Tuesday showed that the economy performed a bit better in the third quarter than previously reported. The Ifo institute said that its business confidence index declined to 90.7 points from 92.5 a month earlier. Economists had forecast a drop to 90.2.

The drop was driven largely by a considerable worsening of companies’ expectations for the next six months. Their assessment of their current situation was only slightly worse. Ifo’s survey is based on monthly responses from about 9,000 companies in various sectors.

Germany entered a partial shutdown on Nov. 2, with restaurants, bars, leisure and sports facilities closing but nonessential shops and schools remaining open. It was originally slated to last four weeks, but federal and state officials appear certain to extend it until shortly before Christmas on Wednesday. Although German authorities hope to start vaccinations by early in the new year, it is likely to be months before all restrictions can be dropped.

Officials are hopeful that the overall damage from the pandemic to Germany’s economy and finances will be manageable. On Tuesday, the Federal Statistical Office said that gross domestic product rebounded by 8.5% in the July-September quarter after a sharp decline during Germany’s more extensive spring shutdown. The quarter-on-quarter growth figure was revised upward from an initial reading of 8.2% nearly a month ago.

Do you know What is Positive GDP growth seen in Q3, need to fight inflation: RB, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India, Expenditure Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1World Economic Forum’s online Davos summit to begin Sunday; Modi, Jinping among listed speakers over six days
2CM Nitish Kumar must bridge political-economic divide in Bihar with more balanced choices on policy fronts
3Kerala passes resolution against CAG’s audit report