German Ifo Business Confidence Weakens Slightly In December

(RTTNews) - German business confidence weakened slightly in December signaling a moderate slowdown in growth, survey results from the Munich-based Ifo Institute revealed Thursday.

The business climate index fell to 108.7 in December from 109 in November. It was forecast to remain unchanged at 109. Nonetheless, it remained above its long-term average.

Assessments of the current business situation declined at the end of the year. The current conditions index dropped to 112.8, while economists expected the score to stay at 113.4.

Meanwhile, the expectations index held steady at 104.7 in December, but below the expected score of 105.

Business sentiment in manufacturing continued to rise, while that in wholesaling cooled down markedly. In construction, the business climate index dipped slightly in December after hitting a record high in November.

The Ifo business climate indicator for the service sector reached another record high of 33.7 balance points in December.

Carsten Brzeski, an ING Bank NV economist, said latest uncertainties, stemming from the attacks in Paris, geopolitical conflicts or the Chinese slowdown, as well as home-made challenges like Volkswagen or the refugee influx can hardly destroy German businesses' optimism.

Bundesbank forecast economic growth to pick up to 1.8 percent next year as exports are set to recover.

The Ifo paints a positive picture of the German economy for now, Jennifer McKeown at Capital Economics, said. The strength of the German economy need not prevent the European Central Bank from making up for this month's disappointment with more policy support next year.