Carsten Brzeski, chief economist at ING, notes that Germany’s Ifo index, just added more evidence to a tentative bottoming out of the German economy as it increased for the fourth month in a row to 96.3 in December, from 95.1 in November.
Key Quotes
“In December, both the current assessment and expectations component increased. However, before anyone gets too cheerful, just want to remind you all that the headline number is still not back where it was in June, earlier this year.”
“This positive Ifo reading brings a conciliatory end to the economic year 2019. It ends the year on a positive note and with the hope for a rebound in 2020. However, as much as we would like to see the German economy leaving the stagnation territory behind, truth is that any tangible bottoming out is still hard to find.”
“With today’s Ifo index, a turbulent year for the German economy draws to a close. A year, in which the economy has been flirting with stagnation and technical recession. A year, in which strong private and public consumption has offset the impact from the manufacturing slump.”
“Looking ahead, the widening gap between a weak manufacturing sector and solid consumption as well as a strong labour market looks hard to sustain. Something has to give.”
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