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German businesses feel gloomier about the next six months

German national flag waves on top of the Reichtstag building in Berlin
German national flag waves on top of the Reichtstag building in Berlin Copyright Michael Probst/Copyright 2023 The AP. All rights reserved
Copyright Michael Probst/Copyright 2023 The AP. All rights reserved
By Greta Ruffino
Published on
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Businesses across Germany have grown more pessimistic about the economic situation for the next six months.

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Economic sentiment among entrepreneurs in Germany about the current business situation declined from 87.2 in November to 86.4 in December.

The figures, published by the German IFO Business Climate Index, were unexpected, as markets had anticipated a slight improvement to 87.8.

They represent a change of -0.92% from last month and -2.81% from one year ago.

German IFO Business Climate Index
German IFO Business Climate IndexGerman IFO Business Climate Index

The survey considers the views of 9,000 firms across manufacturing, the service sector, trade, and construction. 

It measures entrepreneurs' sentiments regarding the current business situation and their expectations for the next six months on a scale from -100 (representing expectations of a worsening economy) to 100 (representing feelings of improvement).

The findings suggest that a swift recovery in the near future remains out of reach as 2023 draws to a close.

According to the economic surveillance of EU economies, the German economy has encountered continuous challenges this year. 

After a weak first half of 2023, industrial production continued to decline through the third quarter. High inflation, resulting in reduced purchasing power, has negatively impacted private consumption.

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