Weak euro fuels German business confidence to 6-month high
Germany’s Ifo Business Climate index, which looks at the confidence of 7,000 firms, increased to 106.7 points in January, up from 105.05 points in December, the third monthly increase in a row, the research center said in a statement Monday. Participating companies cover a wide range of industries, manufacturing, construction, wholesale, and retail.
“Stronger impulses are expected from exports thanks to the falling euro exchange rate,” Ifo President Hans-Werner Sinn said in the statement.
In 2014, the Germany economy expanded by 1.5 percent, beating the German Ministry of Economic Affairs forecast of 1.2 percent.
The data marks a strong turnaround from earlier forecasts that spelled doom and gloom for business sentiment.
In December, the index fell to a 6-month low, and in August, at an even gloomier 13-month low.
"The German economy has got off to a good start to the year,” the head of the country’s top think tank said.
The euro opened the week at a 11-year low against the dollar after Syriza swept elections in Greece, promising to fight against the EU policy of austerity. The euro fell to €1.11 to the dollar before recovering to €1.12 at the time of publication.