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Surprise rise in German business morale dispels recession fears

Surprise rise in German business morale dispels recession fears
FILE PHOTO: The financial district with the headquarters of Germany's largest business bank, Deutsche Bank (C), is photographed on early evening in Frankfurt, Germany, January 29, 2019. REUTERS/Kai Pfaffenbach   -   Copyright  KAI PFAFFENBACH(Reuters)
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By Michael Nienaber

BERLIN (Reuters) – German business morale improved unexpectedly in March after six consecutive drops, a survey showed on Monday, suggesting that Europe’s largest economy is likely to pick up in the coming months after it narrowly avoided a recession last year.

The Munich-based Ifo economic institute said its business climate index rose to 99.6 from an upwardly revised 98.7 in the previous month. This beat a consensus forecast for a reading of 98.5.

“The German economy is showing resilience,” Ifo President Clemens Fuest said.

Companies were more satisfied with their current business situation and they were more optimistic about their business outlook for the coming six months, the survey showed.

“The Ifo survey is a big surprise, especially after the last purchasing managers index,” UniCredit economist Andreas Rees said.

Markit’s survey among purchasing managers showed last week that manufacturing contracted further in March to reach the lowest level since August 2012.

(Reporting by Michael Nienaber; Editing by Paul Carrel)

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