- David Brown at New View Economics
German business sentiment deteriorated for the second consecutive month in April, as winter weather hindered the recovery in Europe's largest economy, the Ifo institute said Wednesday. A gauge of business morale, based on a survey of 7,000 executives, tumbled to 104.4, down from 106.7 in March, below analysts' expectations, which called for a 106.4 reading. The German economy was a main driver of the Eurozone economy for decades, however, it contracted in the final three months of 2012, and latest data is showing that the economy is struggling to leave that gloom behind. The report also showed that firms are now less optimistic about their business outlook, with a sub-index falling to 101.6 from 103.6 in March, while the measure of conditions dropped to 107.2 from 109.9.
"We still expect there to have been a good rebound in the first quarter, although there is a big question mark about the weather," said Anatoli Annenkov, senior economist at Societe Generale SA in London. "The temporary confidence shock from the Italian elections and the Cypriot bailout should fall out of sentiment indicators soon."
"The sharp dip in Germany's Ifo index marks another nail in the coffin for stronger recovery this year," said David Brown at New View Economics.
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