- Klaus Wohlrabe, the economist in charge of Ifo's monthly sentiment survey
Sentiment among German investors declined less than expected in October, while sentiment in the automotive industry even improved, despite the emissions scandal at Volkswagen and slowdown in the emerging markets. According to the Ifo think tank, the business climate index declined to 108.2 this month from 108.5 in September, the lowest level since July. Managers seemed to remain calm despite China's economic slowdown and structural problems in other developing economies—issues that are unlikely to translate into painful losses for Germany's exporters. Even more surprisingly, executives voiced confidence that the current scandal surrounding Volkswagen's emission test cheating software would not have a severe repercussions on the German car industry as a whole.
The Bundesbank said in its monthly report that Germany's economic upswing continued in the third quarter, even though it lost some steam. The government earlier this month revised downwards its economic growth outlook this year to 1.7% from its previous estimate of 1.8%, but kept next year's outlook at 1.8%. However, many private sector economists and the German Chambers of Commerce, or DIHK, are less sanguine about future growth. The DIHK expects growth of only 1.3% for 2016.
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