BERLIN (Reuters) -German business morale unexpectedly worsened in January, declining for the second month in a row as Europe’s largest economy struggles to shake off a recession, a survey showed on Thursday.
The Ifo institute said its business climate index stood at 85.2 versus the 86.7 reading forecast by analysts in a Reuters poll.
The indicator fell from a slightly downwardly revised reading of 86.3 in December.
“The German economy is stuck in recession,” said Ifo president Clemens Fuest.
Uncertainty among companies has risen considerably, Ifo’s head of surveys, Klaus Wohlrabe, told Reuters.
Germany is battling to exit a slump after gross domestic product contracted by 0.3% in 2023.
Last year was plagued by high inflation, high energy prices and weak foreign demand, and topped off with a budget meltdown that prompted deep subsidy cuts while rattling the nation’s fractious coalition government.
The German economic outlook remains cloudy for 2024.
On Wednesday, Ifo revised down its growth estimate, with the economy now expected to rebound by just 0.7% this year.
(Reporting by Rachel More and Reinhard Becker; Editing by Matthias Williams and Mark Potter)
