- Michel Sapin, France Finance Minister
German business confidence slid to the lowest level in four months in June after the latest PMI data showed an improving sentiment in the nation's manufacturing and services sectors. According to the German research institute Ifo, the business climate index, which is based on a survey of around 7,000 German companies, declined to a seasonally adjusted 107.4 in the reported month, compared with 108.5 in May and against economists' forecast for 108.1. The current assessment gauge dropped to 113.1 this month, down from 114.3 in May. At the same time the business expectations index, which measures attitudes towards business prospects over the coming six months, fell to 102.0 in June from 103.0 a month earlier.
Meanwhile, positive news came from France, the Euro zone's second biggest economy, where GDP rose faster than expected, the final figures showed. According to INSEE, France's economic output rose 0.6% in the first quarter, following zero growth at the end of 2014. The growth was boosted by lower oil prices and weaker Euro. Measured on an annual basis, French GDP grew by 0.8%. INSEE expects the French economy to expand at the fastest pace since 2011 this year on the back of stronger domestic demand. Yet, France continues to face persistent problems in the labour market, where the unemployment rate reached a record high in March. The latest data showed the jobless rate stood at 10.4%, while INSEE predicts the rate to climb to 10.6% by mid-2015.
© Dukascopy Bank SA