FRANKFURT AM MAIN: Confidence among German business leaders swelled again in August after the European Union and United States backed off an escalating trade showdown, a regular survey showed Monday.
The Munich-based Ifo institute’s monthly barometer based on a survey of 9,000 firms rebounded to 103.8 points this month, its highest level since February.
In July, the Ifo index had stood at 101.7 points.
“Confidence in German firms has improved noticeably… in addition to a robust domestic economic situation, the truce in the trade conflict with the US contributed,” Ifo president Clemens Fuest said in a statement.
Furthermore, “the German economy is growing robustly,” he added, with the latest data suggesting that third-quarter growth in the eurozone’s economic powerhouse could match the 0.5 percent quarter-on-quarter it booked between April and June.
Companies’ assessments of both their present economic situation and future expectations improved, while firms in the manufacturing, services, trade and construction sectors were all more confident.
A major reason for the sunnier outlook is a deal struck between European Commission President Jean-Claude Juncker and US President Donald Trump last month to back down from a mounting trade confrontation, initially sparked by Trump’s decision to impose levies on steel and aluminium imports.
But while the trade battle appears to on ice for now, tensions could flare up again in future if the mercurial US leader threatens to impose duties on vital European products like cars. —AFP