The seasonally adjusted sentiment index of the ifo Institute for Economic Research at the University of Munich fell to 84.3 points in October from 84.4 points the previous month, which is still the lowest value since May 2020. The October index is in line with expectations of Reuters analysts.
Of the two components of the index, the index measuring the current situation declined for the fifth month in a row, but the index measuring expectations looking to six months ahead showed improvement.
Companies considered their current business situation to be worse than it was a month ago, and the index fell from 94.5 points in September to 94.1 points.
The quantitative index of expectations for the next six months rose slightly in October, from 75.3 points in September to 75.6 points, after a significant decline in the previous month.
“The outlook for businesses has improved, but remains filled with concern. The German economy is facing a difficult winter,” said Clemens Fuest, head of the ifo Institute for Economic Research (ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München eV), assessing the report.
Before the data was released on Friday, Reuters analysts’ consensus calculated that German economic output fell 0.2 percent on-quarter in the third quarter ending in September.
According to IFo forecasts, the economy will continue to contract in the last quarter, and GDP is expected to decline by 0.6%.
According to the official government forecast, Europe’s largest economy will slip into recession next year due to the energy crisis, rising prices and supply chain problems.
