For the first time in 7 years, business climate in Germany has worsened. Calculated by the IFO Institute for Economic Research, the business climate index slipped to 108.5 from 108.6 in April. Yet it still remains at quite a high level.
The Institute's representative said that reduced expectations, which still remain very good, can be explained by export expectations. They reduced to some extent as the euro strengthened slightly, and the world economy is recovering not as fast as some might have predicted. But the expectations, all in all, remain at a good level.
According to the reports, in the first quarter of the current year German GDP growth was 0.3%, that is 0.1% lower than the eurozone's rate. Meanwhile, the Spanish economy, based on domestic consumption, rose by 0.9%, French economy, by 0.6%. Economists explain that as Germany has already passed the stage of long recovery, now the economic growth rate will slightly reduce, unlike other eurozone’s countries.
Statistical data shows that the growth of import volumes is nearly twice as high as that of exports, so 0.2% of GDP growth in the first quarter was taken up by foreign trade. However, experts hope for the best. The report by the Institute for Economic Research has confirmed the predicted growth rate of German economy in this quarter at 0.5%.
