German business confidence rises in April - Ifo

Thursday 24 April 2014 10.24
Germany's Ifo index rose to 111.2 points in April against 110.7 the month before
Germany's Ifo index rose to 111.2 points in April against 110.7 the month before

German business confidence rebounded this month after a slight fall in March in Europe's biggest economy when companies worried about the Crimea crisis. 

The Ifo economic institute's closely watched business climate index rose to 111.2 points in April against 110.7 the month before, beating market expectations. 

Experts polled by Dow Jones Newswires had predicted a slight decline to 110.5 points. 

Analysts said the data showed German businesses had shrugged off their worst fears over a military escalation in the Ukraine-Russia crisis. 

"The situation in eastern Ukraine remains volatile and dangerous and poses the most serious risk to the euro zone recover at the moment," they added. 

"But German businesses seem to estimate that the worst-case scenario of a war between Russia and Ukraine and escalating sanctions all the way to disruptions of Russian energy supplies to Europe remains unlikely. The Ukraine crisis is clearly far from over, but unless it escalates dramatically, it seems unlikely to leave more than a temporary dent in confidence, if at all," they said.

The more upbeat mood came as Germany is increasingly enjoying the benefits of its strengthening domestic demand as well as the broadening recovery in its most important export markets, the euro zone and other developed economies.

Ifo calculates its headline index on the basis of companies' assessments of their current business and the outlook for the next six months. The sub-index measuring current business increased slightly to 115.3, from 115.2 in March. 

The outlook sub-index, which had fallen for two months in a row, rebounded to 107.3 in April from 106.4.