German business sentiment unexpectedly improves in January - Ifo
German business confidence unexpectedly improved in January, according to a widely-followed survey.
The Ifo’s business climate index rose to 117.6 from 117.2 in December, beating expectations for a reading of 117.1.
The current assessment index came in at 127.7 in January from 125.5 the month before, surpassing expectations for a reading of 125.4.
However, the index measuring expectations for the next six months fell to 108.4 from 109.4, missing expectations for it to remain unchanged.
The manufacturing index rose to a new record high in January of 33.2 from 31.8 the month before, while the index for wholesaling printed at 23.5 from 22.6. The retailing index declined to 15.1 from 15.8 and the index for construction edged down to 17.8 from 18.3.
Ifo chief Clemens Fuest said: "The German economy made a dynamic start to the year."
Capital Economics economist Jennifer McKeown said: "January’s rise in German Ifo business sentiment is another sign that the economy is going great guns, but with the euro so strong the ECB is unlikely to signal policy tightening today.
"On the face of it, the Ifo points to a rise in annual GDP growth from Q3’s 2.7% to around 4%. Admittedly, the business expectations component fell slightly, perhaps reflecting the stronger euro. But the index remained at a high level and the current conditions component rose further."