Munich / Berlin (Reuters) – The German economy has started surprisingly well into spring thanks to the weak euro.
The mood in the boardrooms of companies brightened unexpectedly significantly in April and is now as good as for almost a year no more. The barometer of business confidence rose from 107.9 to 108.6 points, such as the Munich-based Ifo institute said on Friday its 7000 survey of managers. Economists had expected only 108.4 meters.
“The German economy continues its recovery,” said Ifo President Hans-Werner Sinn. The CEOs rated their business situation is not as good as since June 2014. The outlook for the next six months, they estimated, however, a little worse than before.
The mood brightened in the construction industry and in wholesale as well as in industry. “The euro’s weakness is like the sluggish development in several regions of the world,” said Ifo expert Klaus Rabe well overlooking large emerging economies such as China, Russia and Brazil, where it no longer runs smoothly. The depreciation of the euro, which has lost over a fifth of its value against the dollar within a year, German products overseas are attractively priced. This boosts sales. At the same time competing products – from the USA – expensive in the domestic market.
at retail and service providers, the business climate clouded, however, put a. “Consumption, housing, investment, exports – none of which grows in the sky,” said KfW’s chief economist Joerg Zeuner. Nevertheless, that Europe’s largest economy properly grow this year. “Our real economy benefits from the weak euro, low interest rates and favorable commodity prices.”
Leading research institutes and the federal government had their forecasts for growth in gross domestic product this year, last raised – around two percent. However, both the production company and factory orders failed last weaker than expected.
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