German business confidence unexpectedly increases in July, according to Munich-based Ifo Institute data. The index, calculated on the basis of a survey of 7,000 companies, rose to 116 points from 115.2 points in June, reaching a record high level. For comparison, the consensus forecast by economists was to drop the index to 114.9 points.
“Sentiment among German businesses is euphoric”, said the Ifo chief, Clemens Fuest. “Companies’ satisfaction with their current business situation reached its highest level since Germany’s reunification. Their short-term business outlook also improved. Germany’s economy is powering ahead”, added he.
German business was experienced in managing the impact of exchange rate moves and was not impeded by gains in the euro, which hit an almost two-year high against an ailing dollar on Monday. It is expected business to continue to do well in the second half of 2017, raising its full-year revenue forecast to 5%.
The Economy Ministry said earlier this month the economy would enjoy solid growth in the second quarter, driven by soaring private consumption and higher construction activity while net foreign trade was unlikely to add to the expansion.
Analysts expect Germany’s gross domestic product (GDP) to have grown by at least 0.6% in the April-June period.