The Business Climate Index posted monthly by Germany’s Ifo Institute has dropped “sharply” according to the organization. It fell to 105.7 in February from 107.3 in January. It is another example of slowing in the global economy, which has led many think tanks and investment banks to lower their gross domestic product (GDP) forecasts for the year.
Sentiment among German businesses continued to weaken in February. The Ifo Business Climate Index for German industry and trade fell to 105.7 points this month from 107.3 points in January, marking its third consecutive decrease. The majority of companies were pessimistic about their business outlook for the first time in over six months. Assessments of the current business situation, by contrast, were slightly better than last month. German businesses expressed growing concern, especially in manufacturing.
The trend is among several that have caused the central banks to either drop rates or hold them steady in a year during which they were expected to increase.