German business sentiment improves beyond expectations in April – Ifo report

The Ifo survey revealed that German business morale improved more than expected in April, according to data released on Wednesday.

The Ifo institute reported that its business climate index increased to 89.4 from 87.9 in March, surpassing the forecasted 88.9.

This marks the third consecutive monthly increase in business sentiment, suggesting the economy may be forming a bottom after a downturn in the winter. Nonetheless, economists remain cautious as overall economic conditions remain at or near contraction levels.

The boost in business morale can be attributed to better conditions among numerous companies, which also enhance the outlook for the near future, indicating the economy is stabilizing, particularly due to support from service providers.

Additionally, German purchasing managers’ index (PMI) data released earlier this week showed a notable rise in April, reaching its highest level in 10 months and surpassing forecasts, which strengthened the services sector.

The German government is expected to slightly raise its growth forecast for this year to 0.3% from a previous estimate of 0.2%.