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Economic Insights


German Ifo drops near to a 30-month low


Business confidence in Germany dropped to 102.3, from previous 103.2, which is the fourth consecutive month drop. The level is near to a 30-month low due to a prolonged currency bloc’s crisis that hit the sentiment and confidence hard. Source: Bloomberg Click the image to enlarge


The Ifo clearly showed the business owners’ view on the future outlook which is negative because operating environment has been deteriorating and postponing the corporate expanding and investment.


So far Germany depends on its Asian export expansion to avoid recession from the Euro Zone contagion, and partly benefited from the low borrowing cost due to the region’s crisis. The exports linking to Germany’s Gross Domestic Product (GDP) chain is still expanding at 2.5% y/y in Q2, higher than 1.2% y/y in Q1. Source: Bloomberg Click the image to enlarge


German Q2 growth is still expanding at 0.3% q/q, but slower than 0.5% q/q in Q1, while the slower growth could not help the entire region from walking into a recession in Q2. Source: Bloomberg Click the image to enlarge