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Wednesday, March 26, 2003

Germany: As Expected the Bad News Continues

The latest ifo survey confirms what is, unfortunately, only the expected.

Germany's closely-watched Ifo business confidence index fell in March, reflecting the fragility of the country's economy and worries about the fallout from the military action in Iraq. The headline index produced by the Munich-based institute fell to 88.1 in March from 88.9 in February, below analysts' expectations, as sentiment for the next six months deteriorated. "Signs in the last two months of an upturn in the business climate have not been confirmed for the time being," said Hans-Werner Sinn, Ifo president. Economists had forecast that the index, which is also seen as a barometer of eurozone growth prospects, would stay at around the same level as in February, after two successive months of rises and an interest rate decrease by the European Central Bank had prompted tentative forecasts of an end to stagnation in Europe's largest economy. Wednesday's index is one of the first sentiment indicators released since the start of the war in Iraq last week, though some 80 per cent of the 7,000 companies that take part in the monthly review were surveyed before the US-led military action started.
Source: Financial Times

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