Prospects for the German economy, the euro zone's biggest, are clouding over, with the debt crisis and financial market turmoil hurting business confidence, data showed today.
The closely-watched Ifo business climate index fell to its lowest level in more than a year this month, as companies become increasingly pessimistic about the outlook for the coming six months.
The index, calculated each month by the leading think-tank Ifo in Munich, fell to 107.5 points in September from 108.7 points in August, its lowest level since June 2010.
Economists had been pencilling in an even steeper decline but a breakdown of the data does not appear to bode well for the German economy later this year and into 2012, analysts said.
A sub-index that measures company assessments of their current situation slipped only fractionally to 117.9 points from 118.1 points. But expectations for the six months to come dropped to 98 points from 100 points, hitting the lowest level since July 2009.
Ifo chief Hans-Werner Sinn said the "continuing favourable situation of companies shows that the German economy has so far managed to decouple from political turbulence."
