Germany’s Ifo business sentiment hit a seven-month high in January


Business confidence in Germany rose to its highest level since June in January, adding to strong signs of recovery as optimism returned earlier in the year and easing fears of an imminent recession.

Ifo’s business-climate index rose to 90.2 in December from 88.6 in January, posting a fourth consecutive monthly improvement, data from the Ifo Institute showed on Wednesday. The increase was in line with the expectations of economists polled by The Wall Street Journal.

January data showed that business confidence continued to recover from September lows. However, compared to the situation before the war in Ukraine, the index stood at 98.8.

“The mood in the German economy has brightened,” said Clemens Foust, president of the Ifo. “The German economy will start the year with more confidence,” he said.

The recent decline in natural gas prices, the government’s implementation of energy price caps for corporations, and China’s rapid opening up are likely to boost short-term sentiment.

The IMF’s gauge of expectations rose to 86.4 from 83.2. However, the current situation index fell slightly to 94.1 in December from 94.4 in January.

The Ifo index is based on a survey of nearly 9,000 companies in manufacturing, services, trade and construction.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com



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