German business confidence unexpectedly declined in December, while remaining close to its record.
Business climate indicator fell to 117.2 from 117.6 in November, the Munich-based Ifo Institute said. Flash data for the previous month showed the score of 117.5. Economists had predicted the index to be unchanged from November’s original figure.
The indicator near the record high reflects a favorable situation in the German economy amid robust domestic spending and recovering global trade. A slight decline suggests that companies are concerned over production constraints, such as difficulties in finding skilled employees.
The assessment of current conditions rose to 125.4 in December from a revised reading of 124.5. The index of expectations declined to 109.5 from 111.0.
According to the latest forecasts of the Bundesbank, Germany's GDP will grow by 2.6% in 2017, not by 1.9% as previously expected. The forecast for 2018 was raised to 2.5% from 1.7%, while the outlook for 2019 was lifted to 1.7% from 1.6%. In 2020, economic growth is expected to slow to 1.5%.
