"At the moment there is no indication that the economy in other euro zone countries is hitting German companies"
- Klaus Wohlrabe, Ifo economist
Mood among businesses in Europe's powerhouse, Germany, has formed an uptrend and followed it in July, cementing expectations German economy and the whole Eurozone are stabilizing. According to figures from the Ifo Institute for Economic Research, a gauge of business morale surged to 106.2 in July up from 105.9 in the preceding month, and outpacing analysts' expectations for a 106.1 reading. At the same time, the index measuring current assessment of the economy rose to 110.1, compared with 109.4 a month ago.
The measure of business climate jumped for the third consecutive month, other indicators improved as well, and even though the six-month business outlook weakened slightly, economists are suggesting Germany is recovering after a six month-long slump. The Ifo Institute now projects a 0.9% growth for Germany in the second quarter, followed by a 0.4% expansion in the two subsequent quarters, leading to a 0.6% growth for the full year. Despite overall brighter picture, business climate in construction continued to fall, as contractors are now slightly more cautious about future economic performance. While construction sector is still suffering, services are expected to have stimulated growth, adding to signs the recent economic setback was temporary.
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