by Chris Black
There was never any stated plan to reinforce the German economy.
It’s in a death spiral as a result of the sanctions on Russia.
German business morale worsened for the second consecutive month in June, a survey showed on Monday, indicating that Europe’s largest economy faces an uphill battle to shake off recession.
The Ifo institute said its business climate index fell to 88.5 this month from 91.5 in May. A Reuters poll of analysts had predicted a smaller drop to 90.7 in June.
“Sentiment in the German economy has clouded over noticeably,” Ifo’s president Clemens Fuest said.
China’s weaker than hoped for economic performance since its reopening from tight COVID-19 lockdowns, a looming U.S. recession and ongoing monetary policy tightening seem to be weighing on German company sentiment, said Carsten Brzeski, global head of macro at ING.
“What is clear is that the optimism at the start of the year seems to have given way to more of a sense of reality,” Brzeski said.
Indeed, expectations were much more pessimistic, with the related Ifo index falling to 83.6 from May’s 88.3. Companies also assessed their current situation more poorly, with that index falling to 93.7 from 94.8.
The economy faces the prospect of a longer recession as domestic demand and the expectations of exporters have both weakened, Klaus Wohlrabe, head of Ifo surveys, told Reuters in an interview on Monday.