Business confidence in Germany worsened considerably in September as companies turned more pessimistic due to the energy crisis.
The Ifo business-climate index fell to 84.3 points in September from a revised figure of 88.6 points in August, data from the Ifo Institute showed Monday. This is its lowest value since May 2020. Economists polled by The Wall Street Journal had expected the index to come in at 87.1.
“The German economy is slipping into recession,” Ifo President Clemens Fuest said. Companies assessed their current business as clearly worse and pessimism regarding the coming months has grown, he said.
The index of the current situation fell to 94.5 in September from 97.5 in August, while the gauge assessing companies’ expectations fell to 75.2 from 80.5.
The Ifo index is based on a poll of about 9,000 companies in manufacturing, services, trade and construction. The decline in confidence is affecting all four sectors of the economy, the report shows.
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