GERMAN business morale unexpectedly increased in May, a survey showed Friday, raising
hopes Europe’s biggest economy is weathering the Iran war energy shock better than feared.
The Ifo institute confidence barometer rose to 84.9 points from 84.5 in April, the first time it has gone up since the start of the conflict.
Analysts had expected a slight decrease.
“The German economy is stabilizing for the time being, although situation
remains fragile,” said Clemens Fuest, Ifo’s president.
The survey had slumped in the months following the start of the US-Israeli war against Iran at the end of February.
The energy shock triggered by the near total closure of the Strait of Hormuz is a heavy blow for Germany’s power- hungry manufacturers, and dimmed hopes of a strong recovery this year for the long-struggling economy.
But a massive ramp-up in defence and infrastructure spending may be offsetting the conflict’s impact and helping to bolster business morale, analysts said.
The latest Ifo survey, based on responses from around 9,000 businesses, showed that companies were more optimistic about both their current situation and future prospects.
Morale among companies in the manufacturing, services and trade sectors improved.
But it fell slightly among construction companies.
AFP
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