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GERMANY-ECONOMY-INDICATOR-IFO
German business confidence slips on global uncertainty
FRANKFURT AM MAIN, Oct 25, 2018 (BSS/AFP) – A closely-watched survey of
German businesses showed falling confidence Thursday, the Munich-based Ifo
institute said, as the eurozone’s largest economy faces gathering clouds over
the single currency area.
The monthly barometer shed 0.9 points in October compared with last month,
to 102.8 points, the poll found — a sharper drop than expected by analysts
surveyed by Factset.
“Firms were less satisfied with their current business situation and less
optimistic about the months ahead,” Ifo president Clemens Fuest said.
“Growing global uncertainty is increasingly taking its toll on the German
economy.”
With exports far outweighing imports, Germany has since last year been a
favourite whipping-boy for US President Donald Trump as he threatened tariffs
against imports from the whole European Union.
Those are on ice for now, but the other front in Washington’s trade war —
China — is also having knock-on effects on Europe and Germany.
Disruption in emerging markets like Turkey, an important trade partner, is
also taking its toll.
Closer to home, fears are growing that Britain could leave the EU in March
without an exit deal, sparking massive disruption to trade with one of the
continent’s biggest economies.
A budget row between Brussels and the populist coalition government in
Rome has meanwhile revived anxiety over Italy’s place in the eurozone.
Lower confidence “is not surprising, as downside risks did not diminish”
in October, said Joerg Zeuner, chief economist at public investment bank KfW,
highlighting the US-China confrontation as well as weaker hard economic data
in Germany.
The headwinds for the eurozone powerhouse prompted the International
Monetary Fund earlier this month to lower its growth forecasts for Germany to
1.9 percent in both 2018 and 2019.
BSS/AFP/HR/1440