The German business environment became critical
reported Mehr News Agency, business confidence in Germany continues to decline, which indicates the existence of widespread economic challenges. Research firm ifo’s business climate index, which gathers views of around 9,000 German businesses in manufacturing, services, trade and construction, fell to 86.6 in August, down from 87 in July and the lowest in five months. is.
The decline is due to worsening current business conditions and an increasingly pessimistic outlook for the future. Clemens Fust, head of the ifo institute, says that the German economy is increasingly falling into crisis. .
Manufacturers reported less satisfaction with the current situation, while service-oriented businesses were more skeptical about the future. Manufacturing sentiment hit its lowest level since early 2020, and the services sector hit its lowest level since February 2024.
Deterioration of German trade conditions
Recent surveys of the private sector also indicated a slowdown in August, with employment falling at the fastest rate in four years. According to the economists of the Hamburg Commercial Bank, with the German Purchasing Managers’ Index (PMI) decreasing to 42.1, which is much lower than expected, the recession in the German manufacturing sector in August. > It deepened and there is no prospect of improvement. The German economy shows its contraction for the 26th month in a row, while the growth in the service sector has decreased further.
According to economists, the possibility of a second consecutive quarter of negative economic growth has increased, which means that we may soon be talking about an economic recession in Germany. Germany’s Federal Statistical Office is scheduled to publish its second estimate of the second quarter’s gross domestic product on Tuesday.
Primary data showed that Germany’s economy unexpectedly shrank by 0.1 percent in the second quarter of 2024, reversing 0.2 percent growth in the first quarter, reversing forecasts for It lost 0.1% growth. The country’s economy has contracted by 0.1 percent year-on-year and has remained without growth for five consecutive quarters.
The European Commission expects the German economy to grow by an average of 0.1 percent in 2024, recovering from a contraction of 0.3 percent in 2023, as domestic demand is expected to pick up slowly. .
Meanwhile, European markets were slightly lower on Monday morning as risk appetite eased due to heightened geopolitical tensions in the Middle East.
