"Recession should be less deep" - Ifo index rises surprisingly clearly

The mood in the executive floors of German companies brightened up surprisingly in November. The Ifo business climate index rose to 86.3 points from the revised 84.5 points in the previous month, as the Munich-based Ifo Institute announced on Thursday in its survey of around 9,000 executives.

Economists surveyed by Reuters had only expected an increase to 85.0 points. Although the companies were less satisfied with their current business, the pessimism with regard to the coming months eased noticeably. "The recession is likely to be less deep than many had expected," said Ifo President Clemens Fuest.

From the point of view of the top economist, the mild climate so far, full gas storage facilities and the concrete plans for LNG terminals speak for a slight brightening of the economic picture. According to the Bundesbank, Germany is facing a winter recession. But a gas shortage could probably be avoided. And current survey data from the financial service provider S

In view of the surprising increase in the ifo index, Federal Finance Minister Christian Lindner (FPD) was cautiously optimistic that the economic situation in Germany would recover quickly. "Of course we are all optimistic - and the federal government is also doing everything in its power to ensure that the difficulties that we see in the economy do not lead to deep cuts," Lindner told the WELT television station.

However, the FDP politician also warned against overconfidence. "We have to be careful. We don't know exactly what the next year will be like, economically. Therefore there is no reason for the all-clear.” Instead, “cautious optimism” is appropriate, according to Lindner.

In the summer quarter, the economy was still growing due to the lifting of many corona measures. Gross domestic product increased by 0.3 percent from July to September.

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