- Carsten Brzeski, an economist at ING Group
Confidence among German companies and investors hit a seven-month high in January, adding to signs that Europe's largest economy is recovering from a slump at the end of last year. A gauge, which measures the direction of further economic development for the next six months, rose to 104.2 points in January from 102.4 in December. At the same time, Ifo's gauge of executives' expectations improved to 100.5 from 98, while a measure of the current situation jumped to 108 from 107.1. Friday's data may prove that the economy is still growing, despite the fact that the Bundesbank has lowered its growth forecast for 2013, saying the economy will shrink by around 0.5% this year, after a modest growth of 0.7% in 2012.
"Today's Ifo index nicely illustrates the green shoots in the German economy," said Carsten Brzeski, an economist at ING Group in Brussels. "Even if the current harsh winter weather delays the blossoming somewhat, growth should return, leaving the contraction of the fourth quarter quickly behind."
"The contraction in the fourth quarter of 2012 seems to be short-lived, with fears of a eurozone breakup receding and prospects improving for the U.S. and China," said Carsten Brzeski, an economist at ING in Brussels.
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