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German Ifo index fell slightly in December, outlook sub-index looked up

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 17, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Germany’s Ifo index released today showed a slight dip in German business confidence in December. The Ifo index fell 108.7 in December, from 109 in November. Despite this month’s fall, the index continues to remain at high levels signifying the German economy’s resilience. Ifo calculates its headline index based on companies' assessments of the current business environment as well as the outlook for the next six months.

    The sub-index measuring current business fell by 0.6 point to 112.8 points. The outlook sub-index, on the other hand remained unchanged at 104.7 points, the institute said. Ifo president Hans-Werner Sinn observed, “the headline index and the two sub-indices are around three points above the respective levels seen in December 2014.”

    The manufacturing sector after doing relatively well for the large part of the year, has weakened only in recent months; while the construction, retail and wholesale sectors have been driving the strong Ifo index performance in recent months. It thus can be said with certainty that the German economy is currently being driven by domestic factors. The Ifo index for the service sector has also recently climbed to its highest level since early 2005.

    The German economy look set to end the year with solid growth. Domestic demand, private consumption to be specific spurred growth. The economy has shown resilience this year in the face of challenges that appeared in the form of the Greek crisis, China slowdown and refugee influx.

    The economy will likely continue its growth story in the next fiscal as well. However the growth pace cannot be expected to be strong.
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