German business sentiment improves more than expected in April – Ifo report

German business morale improved more than expected in April, Ifo survey showed on Wednesday.

The Ifo institute said its business climate index rose to 89.4 compared with 87.9 in March and beat forecast at 88.9.

April’s increase marks the third straight monthly rise, generating an initial signal that the bottom of economic downturn in winter is forming, however, economists remain cautious, as overall economic conditions are still at or close to contractionary territory.

Overall business morale was boosted by improved conditions in the number of companies, which also brightens the outlook for the near future, signaling that economy is stabilizing, especially thanks to service providers.

German purchasing managers’ index data (PMI) released earlier this week, showed April figure rising well above forecast and hitting the highest in 10 months, boosting the activity in services sector.
The German government is expected to slightly improve its growth forecast for this year to 0.3%, from 0.2% previously.