Ifo, a prominent German economic research institute, has revealed that business climate in Germany experienced a larger-than-expected decline in May. The significant factor contributing to this decrease is the markedly reduced forecast for future economic conditions. This latest development serves as another indication of the challenging economic hurdles currently facing Germany, which boasts the largest economy in Europe.
According to Ifo, its business climate index recorded a value of 91.7 in May, falling from April’s figure of 93.4. This decline marks the first drop after six consecutive months of gains. Analysts had anticipated the index level for May to be around 93.0.
Clemens Fuest, President of Ifo, stated, “Companies in Germany are expressing concerns about the economic outlook for the upcoming summer.” This sentiment is reflected in Ifo’s index of economic expectations, which fell from 91.7 in April to 88.6 in May.