- Sigmar Gabriel, Vice Chancellor
German business morale improved more than expected in August as companies remained confident the Euro zone's number one economy is resilient enough to withstand China's slowdown. The Ifo institute's business climate index inched higher to 108.3 this month, up from 108 in July and overshooting the median estimate for a decrease to 107.6. In its August monthly bulletin the Bundesbank said that Germany is set for "solid" growth in the remainder of the year. Robust domestic spending, supported by record-low unemployment and borrowing costs, could provide a shield against weakness in China, German third-biggest trading partner. The Ifo's Current Assessment sub-survey, indicating current conditions in the German economy, booked 114.8 points, compared with the previous month's figure of 113.9. At the same time, the Expectations Index, reflecting companies' projections for the next six months, slid to 102.2, from 102.3.
The Euro zone's biggest economy grew 0.4% in the second quarter, following the 0.3% expansion in the three months through March. The annual gauge on a non-seasonally adjusted basis showed 1.6% growth, after the first quarter saw a revised 1.2% gain. German overseas sales increased 2.2% in the three months through June, while private consumption gained 0.2%, and capital investment contracted 0.4%.
© Dukascopy Bank SA