German IFO Business Climate Index drops to 88.6

The IFO financial gauge is used to gauge the German economy, the IFO business climate index fell to 88.6 in July.

The value of July was the highest since June 2020. At the same time, in June 2022, the index reached an even higher value – 92.2 points. The maximum index score was recorded on July 21, 2021 – 100.6 points.

It is noted that the business climate in the construction industry decreased by 17 points, in trade – by 21.6, in the service sector – by 0.9, in business – by 7.1.

According to the report, the index fell due to rising energy prices and the risk of gas shortages amid the imposition of sanctions on Russia.

Meanwhile, analysts had expected the Ifo business climate index to fall to 90.2 in July.

It was reported last week that the International Monetary Fund (IMF) lowered its growth forecast for the German economy in 2022 and 2023. This year, the country’s GDP will grow by 1.2%, and next year it will rise by 0.8%.

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