German business confidence dips in September after five months of increases

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FRANKFURT/BERLIN: The Ifo institute's monthly barometer slid to 92.7 points from a seasonally adjusted 93.2 points in September, marking the first dro...

A worker at the Volkswagen assembly line in Wolfsburg, Germany. Ifo's data, based on 9,000 respondents, showed uneven recovery in Germany, with sentiment strengthening in its key manufacturing industry, while worsening signficantly in the services sector. – REUTERSPIXThe Ifo institute's monthly barometer slid to 92.7 points from a seasonally adjusted 93.2 points in September, marking the first drop after five months of rises.

The figure"is not weak enough to fear another collapse of the economy," said Carsten Brzeski at ING, but the outcome"definitely marks the end of the rebound and the start of double-dip fears." "Everything seems like a deja-vu experience," KfW economist Fritzi Koehler-Geib said."It's therefore not surprising that the business climate is clouding over."

German gross domestic product is expected to shrink 5.4% in 2020, according to a group of think-tanks including Ifo, with the economy not set to recover to pre-crisis levels until the fourth quarter of 2021. This means the recession triggered by the coronavirus pandemic will be slightly milder than the loss of output caused by the global financial crisis in 2009 when GDP fell by a record 5.7%.

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