Business confidence in Germany worsened in September as companies turned pessimistic over the energy crisis.
The Ifo business-climate index fell to 84.3 points in September from a revised 88.6 points in August, data from the Ifo Institute showed on Monday. This is its lowest value since May 2020. Economists polled by the Wall Street Journal had expected the index to come in at 87.1.
“The German economy is sliding into recession,” said Clemens Fust, president of the Ifo. Companies have clearly assessed their current operations and assessed them as disappointing in the coming months, he said.
The current conditions index fell to 94.5 in September from 97.5 in August, while the company’s expectations fell to 75.2 from 80.5.
The Ifo index is based on a survey of nearly 9,000 companies in manufacturing, services, trade and construction. The decline in confidence is affecting all four sectors of the economy, according to the report.
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