German business confidence unexpectedly rebounded in July as the economy showed signs of a pickup and concerns eased over the crisis in Greece.
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The Munich-based Ifo economic institute said Wednesday that its closely watched business confidence indicator climbed to 108 points from 107.5 in June.
“Forget about Greece? This is at least how German businesses seem to look at Greek turbulences of the last weeks, judging from the latest Ifo numbers”, wrote Carsten Brzeski, chief economist at ING-DiBa. Analysts had forecast a drop to 107.2 points this month.
While the Ifo indicator’s gauge measuring business leaders’ expectations of future economic conditions rose from 113.1 points to 113.9 points, while the index gauging their assessment of current conditions edged higher from 102.1 to 102.4. The business prospects too were somewhat more optimistic after three consecutive declines. A preliminary agreement earlier this month on a new bailout for debt-laden Greece dampened fears of a potentially disruptive Greek exit from the 19-nation euro currency, though a full deal still has to be hammered out.
The monthly index is based on a survey of around 7,000 German firms in the manufacturing, construction, wholesale and retail sectors. “Even if the dose has been reduced somewhat, the German economy is still on steroids, ” he added.
The Ifo institute polls several thousand managers each month on their assessment of the economy.
He also said this year Germany’s trade-reliant economy could be impacted by “longer-than-expected periods of weakness of the US and the Chinese economy”.
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She warned, however, that sentiment in Germany could deteriorate again as negotiations in Greece could stumble.
