US, WASHINGTON (ORDO NEWS) — The business climate in Germany has worsened in March to its lowest level since 2009, a study showed on Thursday, indicating that Europe’s largest economy is sliding into recession due to the effects of coronavirus.
The German business climate index, calculated by the Ifo German Institute of Economics, fell to 87.7 points in March from 96.0 points in February, preliminary data showed.
“This is the sharpest drop since 1991, as a result of which the index reached a minimum since August 2009,” Ifo CEO Clemens Fust said, adding that the business expectations index has especially worsened, reaching a historic low.
“Germany’s economy is fast moving towards a recession,” Fust said.
The survey on which the preliminary data is based was conducted from March 2 to March 18. The final value will be released March 25th.
The DIW Institute in its own report indicated that an outbreak of coronavirus could significantly affect the German economy in at least the next two quarters, and predicted a 0.1% decline in GDP in 2020.
This forecast is based on an optimistic scenario with a sharp decline in business activity and its sharp recovery, the institute said. If the uncertainty among companies and consumers caused by the coronavirus continues, the recession could be much worse, DIW said.
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