August 2003 - Nr. 8
Solid rise in business sentiment signals upswing
TWIG - Germany’s closely-watched Ifo business climate index rose for the third consecutive month in June, boosting hopes that an economic upswing is just around the corner.
The business climate index rose from 88.8 to 89.2 points in June. The part of the index that looks at expectations for the future rose sharply to 100.2 from 98.6, while the part that assesses current conditions fell slightly.
While short of some analysts’ expectations, the increase in overall sentiment is nonetheless regarded by experts as "a relatively certain sign that we’ll have an upturn," said Ifo chief economist Gernot Nerb.
Mr. Nerb credited the government’s 16 bn Euro tax cut and its program of labour market reforms for helping to perk up economic expectations in Europe’s biggest economy.
The Ifo business climate index is based on a monthly survey of around 7,000 business executives in western Germany. It reflects their views of the current and future business climate, but not actual economic output.
