Pessimism regarding the coming months has grown decidedly; in retail, expectations have fallen to a record low and the German economy is slipping into recession, institute president Clemens Fuest said in a note.

German economic sentiment has considerably deteriorated, according to Ifo Institute for Economic Research in Munich, whose business climate index fell to 84.3 points in September, down from 88.6 in August. This is its lowest value since May 2020. The decline has hit all four sectors of the economy and firms assessed their current business as clearly worse.

In manufacturing, the index fell tangibly. Companies were less satisfied with their current business. They are definitely worried about the next six months. The last time expectations were this pessimistic was in April 2020. The mood has soured across almost all industries. Order books shrank further, he said.

In the service sector too, the business climate index took a nosedive.

In trade, business climate worsened again. For the first time since February 2021, the business situation is back in negative territory. Expectations also darkened further.

Fibre2Fashion News Desk (DS)