Difficult times for the German economy

Over the last two days, ifo Institute have published ifo Business Climate and Export Expectations for Germany. The developments in German economy leave little space for optimism. The ifo Business Climate Index fell from 87.0 points in July to 86.6 points in August. It has been falling over the last couple of months. Further, German companies assessed not only their current situation as worse but also expectations were more pessimistic. According to the statement of the ifo Institute, the German economy is increasingly falling into crisis. The development of the index in the manufacturing sector draws our attention, as the index fell considerably, and it is at comparably low levels to the Great Financial Crisis of 2008 and 2009 and to the pandemic shock. In particular, the situation for investment goods manufacturers is difficult. Sentiment in the German export industry has deteriorated as well as across sector export orders have declined, so did the expectations for international sales.