German business morale rose more than expected in June as companies’ assessment of the current situation improved and their optimism increased towards the second half of the year in the world’s largest economy. Europe, an investigation revealed today.
The Ifo Institute said its business climate index rose to 101.8 from 99.2 in May. A Reuters poll of analysts showed a June reading of 100.6.
“The German economy is emerging from the coronavirus crisis,” Ifo President Clemens Fuest said in a statement.
Chancellor Angela Merkel said this week that Germany was on the verge of a strong economic recovery, adding that Bundesbank chief Jens Weidmann had given the cabinet a very positive assessment of the economic outlook.
The German central bank raised its growth forecast at the start of the month and now expects the economy to reach pre-pandemic levels as early as the next quarter and grow 3.7% this year and 5%. 2% next year.
German authorities have relaxed Covid-19 restrictions in light of the drop in infections and the increase in the number of vaccinations.
The rebound in the lockdown is the biggest upward jump in retail conditions since German reunification more than three decades ago, said Ifo economist Klaus Wohlrabe.
“The German economy is currently in excellent shape,” said Thomas Gitzel, economist at VP Bank Group.
“However, the pandemic is still not completely eliminated as an economic stumbling block. The Delta variant worries not only virologists but also economists,” he added.
The share of Covid-19 infections caused by the more easily transmissible Delta variant of the coronavirus has doubled in Germany in one week and is expected to gain ground compared to other variants, the public health agency of the Robert Koch Institute.