Germany's IFO Business Climate Index at 90.5 in July... Rising for 3 Consecutive Months

Analysis of Germany's Entry into Economic Recovery Phase

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[Asia Economy Reporter Lim Cheol-young] Germany's July IFO Business Climate Index recorded 90.5, surpassing experts' forecasts. With three consecutive months of increase, there is an assessment that the German economy is entering a recovery phase.

According to the German IFO Institute for Economic Research on the 27th, the July Business Climate Index stood at 90.5, exceeding experts' forecast of 89.0. The Business Climate Index hit a historic low of 74.3 in March but has been rising for three consecutive months since rebounding in May.

KfW's Fritz Quiller-Seib, Chief Economist, said, "The German economy has entered the path of recovery," and predicted, "Germany's economic growth in the third quarter will be exceptionally strong."

According to Dow Jones, Martin Morrison, Chief European Economist at DWS, also stated, "This shows that Germany has officially returned to recovery mode," and analyzed, "Germany has coped well with the COVID-19 pandemic and economic shocks." He added, "The European Union (EU)'s fiscal policies are also leading this improvement in sentiment."

However, he emphasized, "We must not hide the fact that there is still a long way to go until everything normalizes." Marco Wagner, Senior Economist at Commerzbank, also pointed out, "The rise in the Business Climate Index is encouraging, but expectations for economic recovery should not be exaggerated."

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