Germany’s business outlook unexpectedly improved to the highest in more than a year, defying recent turmoil in financial markets.
(Bloomberg) — Germany’s business outlook unexpectedly improved to the highest in more than a year, defying recent turmoil in financial markets.
An expectations gauge by the Ifo institute rose to 91.2 in March from 88.4 the previous month. That’s stronger than predicted by any economist in a Bloomberg survey, where the median estimate anticipated a slight drop. An index of current conditions also increased.
“Despite the turbulence at some international banks, the German economy is stabilizing,” Ifo President Clemens Fuest said Monday in a statement.
Germany’s economy has been showing signs of improvement in recent months, even as analysts still predict a mild recession in the sixth months through March. But the collapse of Silicon Valley Bank in the US and the emergency rescue of Credit Suisse Group AG have rattled investors and raised questions about the broader stability of the financial industry at a time of soaring interest rates and high inflation.
On Friday, Germany’s biggest lender — Deutsche Bank AG — was at the center of another selloff. Shares plummeted by the most in three years, with Chancellor Olaf Scholz rushing to its defense. Its stock rose in early trading on Monday.
Beyond the banking woes, Germany’s dominant manufacturing sector is still wobbling. A gauge of purchasing managers last week showed that private-sector growth was driven solely by services, while industry was lacking momentum.
–With assistance from Kristian Siedenburg, Joel Rinneby and Jana Randow.
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