German business morale improved more than expected in October, rising for a sixth consecutive month, the Ifo Institute said on Monday. Its business climate index rose to 90.2 points in October from 89.9 in September, above the 90.0 forecast in a Reuters poll of analysts, Reuters reported. "The economic recovery is continuing," Ifo President Clemens Fuest said.
Source: Ifo Institute, Oct 26; Reuters via Devdiscourse, Oct 26
The rise was driven by expectations: the expectations index climbed to 91.6 in October from 90.4 in September, even as companies assessed their current situation as slightly worse, the Ifo Institute said. VP Bank chief economist Thomas Gitzel said companies were more optimistic about future business prospects than at any time in more than four and a half years, Reuters reported.
Source: Reuters via Devdiscourse, Oct 26
Growth forecasts raised, but third quarter still soft
The German government has raised its growth forecast to 1.3% in 2026 and 1.1% in 2027, from April forecasts of 0.5% and 0.9%, Reuters reported. Third-quarter growth data due on Friday is expected by economists polled by Reuters to show 0.1% growth quarter-on-quarter. Hamburg Commercial Bank chief economist Cyrus de la Rubia said the sixth straight Ifo rise suggested Germany's economy is on a growth trajectory despite adverse circumstances, while Capital Economics said it still expected the economy to have stalled in the third quarter before returning to growth in the fourth, helped by fiscal stimulus and signs of labour-market recovery.
Source: Reuters via Devdiscourse, Oct 26
European shares also recovered on Monday, with the pan-European STOXX 600 up 0.4% and Germany's benchmark index up 0.9% after the Ifo release, as oil prices eased and investors looked ahead to European Central Bank and US Federal Reserve meetings later this week, Reuters reported.