Christoph Weil, Senior Economist at Deutsche Bank, has stated that the German IFO Business Climate Index’s fourth consecutive monthly decline suggests a higher likelihood of economic contraction in Germany during the latter half of the year. This trend further reinforces the dovish stance against a September rate hike by the European Central Bank (ECB).
The drop in the IFO index is attributed to heightened pessimism regarding current business conditions among enterprises.
This indicates that a slowdown in domestic demand is impacting Germany’s output, and following the ECB’s cumulative 425 basis points of rate hikes, other eurozone countries’ outputs have also been affected.
With central banks in other Western nations also significantly raising rates, there is expected to be little growth momentum in countries outside the eurozone as well.
