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German business morale improves again in March

AFP . Frankfurt
28 Mar 2023 00:00:00 | Update: 27 Mar 2023 23:11:57
German business morale improves again in March

German business confidence climbed for the sixth straight month in March, a key survey showed Monday, but analysts warned that recent banking turmoil could still rattle Europe’s biggest economy.

The Ifo institute’s monthly confidence barometer, based on a survey of about 9,000 companies, jumped to 93.3 points, up from 91.1 points in February.

The improvement was better than expected, with analysts surveyed by Factset predicting a reading of 91.2 points.

“Despite turbulence at some international banks, the German economy is stabilising,” said Ifo president Clemens Fuest.

Lower energy prices and the reopening of China’s economy have boosted confidence in recent months, as Germany proved more resilient than initially feared to the fallout from the Ukraine war.

But the economy is not out of the woods yet, said ING bank economist Carsten Brzeski.

“We fear that the latest financial turmoil will reach the real economy in the coming months,” he said, in a nod to recent stress in the global banking system.

The impact was already visible in Germany’s closely-watched ZEW investor confidence survey last week, which fell for the first time in six months following the collapse of several US regional lenders and the forced UBS takeover of Credit Suisse.

“The Ifo index can react with a delay of one to two months to unexpected events and financial market turmoil can clearly affect the real economy over time,” Brzeski warned.