BERLIN (Reuters) – The morale of German entrepreneurs improved in March, beyond expectations, shows a survey published on Friday by the Ifo institute.
The business climate index came in at 87.8, compared to 86.0 forecast by the Reuters consensus. The previous month, it stood at 85.7 (revised from 85.5).
Companies’ outlooks became much less pessimistic in March and their assessments of the current business situation also improved, the survey said.
On the foreign exchange market, the euro reduced its losses slightly after the publication of this indicator, now down 0.4% to 1.0816 dollars.
However, the improvement in March should not be enough to prevent Europe’s largest economy from falling into a new recession.
“The German economy sees light on the horizon,” said Ifo President Clemens Fuest.
“The strong improvement in the business climate at Ifo gives us hope,” said Jörg Krämer, chief economist at Commerzbank, noting that the moderating effect of massive increases in interest rates and prices energy was starting to fade.
“However, we should not confuse the end of the recession during the summer semester with a real recovery,” he warned.
Germany is expected to enter a new technical recession in the first quarter of this year, after its economy contracted by 0.3% in the final quarter of last year.
(Reporting Maria Martinez, written by Rachel More, Claude Chendjou, editing by Kate Entringer)
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