German IFO survey hits five-month high

Date: Wednesday 25 Jan 2012

Germany's business climate indicator for January registered a reading of 108.3 points compared to 107.3 in December, according to the German IFO Instutite located in Munich.

This is the third consecutive increase and a five-month high for this indicator. The market consensus was expecting a reading of 107.8.

One year ago, the indicator stood at 114.0 points (current assessment at 117.5 and expectations at 110.6).

Looking at the IFO components, we see that the current assessment index fell to 116.3 points from 116.7 in the previous month, while the market was expecting 116.8.

The expectations index rose to 100.9 from the previous 98.6. The consensus estimate was 99.0.

IFO economist Abbenger said that the German industry is seeing a better economic environment that is clearly supported by exports. He believes that the decline of the euro has helped the export industry and rules out a recession.

According to analysts at Digital Look, the data is positive as it is the third consecutive rising month. "This improved pattern can be seen spreading over to the other main German surveys (ZEW and GfK)," they said. They analysts believe that the data should be positive for the euro and the Dax while negative for the Bund.

F.M.

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