Germany’s business confidence highest since May 2023

Business sentiment in Germany has increased to its highest level since May 2023 in April, the latest data by the Ifo Institute showed.

The Ifo Business Climate indicator was reported at 89.4 in April, while improving from 87.9 in the previous month.

In comparison, a consensus of analyst estimates had pointed to a reading of 88.9.

The latest result came amid rising expectations of potential interest rate cuts by the European Central Bank and a step-by-step easing of inflationary pressures.

In April, businesses were less pessimistic about the upcoming months, with the respective gauge coming in at 89.9, up from 87.7 in March.

Additionally, companies assessed the current business situation as being less gloomy, with the respective sub-index standing at 88.9 in April, up from 88.1 in March.

Taking into account major industries, business sentiment improved among manufacturers (-8.5 in April versus -9.9 in March), service providers (+3.2 in April versus +0.4 in March), traders (-22.0 in April versus -22.9 in March) and constructors (-28.5 in April versus -33.2 in March).

The Euro was 0.12% weaker on the day against the US Dollar, with the EUR/USD currency pair last trading at 1.0688.