Germany’s business confidence has reached its highest level since April 2023, driven by optimism over increased public spending despite ongoing global concerns. The Ifo Business Expectations Index rose to 90.7 in June, up from a revised 89.0 in May, marking the strongest reading in more than two years.
According to the Ifo Institute, the rise in sentiment reflects growing optimism among German companies. This optimism appears to outweigh concerns about U.S. tariffs, as well as the ongoing conflicts in the Middle East and Ukraine.
The latest reading exceeded market expectations; economists surveyed by Bloomberg had forecast a more modest increase to 89.9.
Commenting on the results, Ifo President Clemens Fuest stated, “Confidence is gradually being built in the German economy.”
The figures raise hopes that Europe’s largest economy may finally be gaining momentum after years of stagnation, despite facing significant global and domestic challenges.
Supporting this outlook, S&P Global’s business survey released on Monday indicated that economic activity in June unexpectedly returned to growth. The rebound was attributed to expectations of sharply higher defense and infrastructure spending under Germany’s new government, following a brief contraction in May.
Source: Bloomberght/ Prepared by: İlayda Gök