Ifo Cautiously Optimistic About German Economy

Posted Monday, January 27, 2020 by
Skerdian Meta • 1 min read

The Eurozone economy has been weakening for nearly two years now, mainly due to the US-China trade war, which has hurt the manufacturing sector. Germany has been the most affected country, with manufacturing and industrial production in recession for quite some time.

Although, the slowdown has stalled in recent months and we have seen some very slight improvement. Earlier this morning, Ifo economist, Klaus Wohlrabe, commented after the Ifo business climate report earlier, making some positive comments as below:

  • There is reason to be cautiously optimistic on German economy
  • Industrial sector is slowly emerging from crisis
  • Uncertainty has decreased in the last two to three months
  • Helped by Brexit clarity and settlement in US-China trade conflict
  • Says that Iran crisis did not play a big role in the survey earlier
  • Expects German economy to expand by 0.2% in Q1, probably 0.1% in Q4 2019

Most of his comments are correct; the uncertainty has decreased, after the UK elections and the Phase One deal between US and China. The decline in the industrial sector seems to have stalled as well now, but I wouldn’t say it’s emerging from the crisis, yet. It is still in recession together with manufacturing. Besides that, the Ifo business climate missed expectations today and softened further. So, nothing here to be optimistic.

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