- Carsten Brseski, chief economist at ING-DiBa
German business confidence declined for a third consecutive month in February, as the outlook among manufacturing companies plummeted at the sharpest pace since shortly after the Lehman Brothers bankruptcy in 2008. According to Ifo economic institute, the business climate index declined to 105.7 in February, down from 107.3 a month earlier. China's slowing growth is hurting global trade and hurting German exporters, with net trade dragging on economic growth last quarter. Business expectations declined sharply to 98.8 from 102.3 in January, while current conditions climbed to 112.9 from 112.5 last month.
German exports decreased 0.6% in the final quarter of 2015, the Federal Statistics Office reported. Capital investment climbed 1.5% and government spending rose 1%, leading the 0.3% growth of gross domestic product. Measured on an annual basis, the Euro zone's number one economy expanded 1.3% during the quarter, while for the whole 2015, economic output increased 1.7%. Deteriorating prospects for the world's economy and volatile financial markets threaten to undermine growth in the German economy. Destatis reported that public consumption in Germany climbed 1% in the fourth quarter from the previous period, while private consumption inched up 0.2% over the reported period, supported by a robust labour market and increasing wages.
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