Data published by the Ifo Institute showed that the business climate in Germany declined moderately in June, due to higher energy prices and the risk of gas shortages.
In June, the business climate index fell to 92.3 points compared to 93.0 points in May. Economists had expected a decline to 92.9 points. The current assessment index declined to 99.3 points from 99.6 points last month (revised from 99.5), which was higher than consensus estimates (99.1 points). Meanwhile, the expectations index, reflecting the forecasts of companies for the next six months, fell to 85.8 points from 86.9 points in May. Economists had expected an increase to 87.4 points.
Commenting on the latest data, Ifo President Clemens Fuest said that “the worry lines in the German economy are getting bigger”.
"The expectations of the company have become more pessimistic. However, there are no signs of a recession now, despite the increased uncertainty," Fuest said, adding that the threat of gas shortages has increased the uncertainty of companies.
"Price expectations have decreased slightly, but every second company plans to raise prices in the next three months. Meanwhile, export expectations have also decreased slightly," the Ifo President noted.