BERLIN, Oct 25 (Reuters) – German business morale was unchanged in October, thanks to an expected improvement in companies defying forecasts of further contraction, analysts said, and all signs point to continued declines ahead. .
The Institute’s business climate index fell to 84.3 from a revised reading of 84.4 in September. Analysts polled by Reuters had expected a drop to 83.3.
The survey’s expectations index rose to 75.6 from 75.3 last month, the first rise since May.
“Their prospects have improved but they are still worried about the coming months, as the German economy faces a difficult winter,” said Ifo President Clemens Fust.
Analysts were similarly gloomy after the German government announced a sharp increase in energy prices, despite the higher-than-expected figures.
LBW Bank’s Jens-Oliver Niklash said: “Today’s business climate reading will do nothing to change the looming recession. The coming months may only add more gloom.”
Hauck Aufhaeuser Lampe Private Bank Chief Economist Alexander Kruger concluded: “Companies remain stuck in a depressed state, the energy crisis is hampering economic life.”
An Ifo survey of nearly 9,000 managers last week by the ZW Economic Institute showed that German investor sentiment was less pessimistic than expected, also due to a price freeze for gas and electricity.
The energy crisis, rising prices and supply bottlenecks will take their toll, with the German government expecting Europe’s largest economy to slip into recession next year.
Ahead of the statistics office’s release on Friday, experts polled by Reuters expected the German economy to contract by 0.2% in the third quarter from the previous quarter.
Ifo predicted that Germany would contract by 0.6% in the fourth quarter.
Sign up now for unlimited access to Reuters.com
Reporting by Miranda Murray, Rachel More, Reinhard Becker, Rene Wagner and Frank Siblet Editing by Kirsti Knolle and Tomasz Janowski
Our standards: The Thomson Reuters Trust Principles.
