German Business Confidence Rebounds
By Jana Randow
April 24 (Bloomberg) -- German business confidence rebounded more than economists forecast from a 26-year low in April as interest-rate cuts and government stimulus packages boosted expectations that the recession will ease later in 2009.
The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, increased to 83.7 from 82.2 in March. Economists expected a gain to 82.3, the median of 36 forecasts in a Bloomberg News survey showed.
The European Central Bank has signaled it will cut its benchmark rate to a new record low next month and Chancellor Angela Merkel’s coalition plans to spend about 82 billion euros ($107 billion) to stimulate growth, including tax breaks and investment in infrastructure. Even so, Germany’s leading economic institutes predict the economy, Europe’s largest, will shrink by 6 percent this year, the most since World War II.
“With another round of downward revisions to the German growth forecasts, it is very easy to simply run with the pack and to dismiss first signs of green shoots,” said Carsten Brzeski, senior economist at ING Groep NV in Brussels. “However, these green shoots are there. The free-fall of the economy seems to have come to an end.”
Ifo’s measure of expectations increased to 83.9 from 81.6 and a gauge of current conditions rose to 83.6 from 82.7. |
