German Ifo index unexpectedly rebounded in November after six months of consecutive decline, from the two-and-a-half-year low seen in October. This measure of German business confidence, based on survey of 7000 executives, went up to 101.4 from 100.0, against consensus expectations of continued deterioration to 99.5. The Ifo’s measure of expectations went up as well, to 95.2 from 93.2 in the previous month. Despite the encouraging improvement in German business confidence in November, the Ifo index still remains at a low level. The euro area fell into recession in 3Q and this weakness of Germany’s largest trading partner risks that the German economy will stagnate or even contract in 4Q. Moreover, uncertainties as to the resolution of the eurozone debt crisis and the fiscal cliff in the US are likely to continue to weigh on companies’ sentiment in the upcoming months. On the other hand, it is the China’s recovery gaining momentum that might continue to help ease concerns about the severity of economic slowdown.
Germany, Ifo Business Climate, Nov: 101.4 (100.0 in Oct, cons: 99.5)
Germany, Ifo Current Assessment, Nov: 108.1 (107.2 in Oct, cons: 106.3)
Germany, Ifo Expectations, Nov: 95.2 (93.2 in Oct, cons: 93.0)