24-Jun-2025 15:16

German business confidence rose to the highest level in 13 months in June driven by improving hopes that fiscal measures will underpin economic recovery, a closely watched survey showed on Tuesday.

The business climate index registered 88.4 in June, up from 87.5 in May, the Munich-based ifo Institute revealed. This was the highest level since May 2024, when the reading was 88.9. The score was forecast to improve to 88.1.

The German economy is slowly building confidence, the institute said.

The current situation index rose only marginally to 86.2 from 86.1 in the previous month. The index was seen rising to 86.5.

The expectations index advanced to 90.7 from 89.0 in May. The score was forecast to climb moderately to 90.0. The reading was the strongest since April 2023.

Business confidence among manufacturers improved slightly in June. While companies were noticeably more optimistic about the coming months, current business performance has been less favorable. Moreover, they were very dissatisfied with order books.

In the service sector, business confidence showed strong improvement in June. Companies viewed their current situation somewhat more positively and significantly raised their expectations.

The business climate in trade improved in June. Traders were more satisfied with current business, and their expectations were less pessimistic.

The upward trend in the business climate continued among contractors. Expectations climbed to their highest level since February 2022, though they remain marked by skepticism. Meanwhile, their assessments of the current situation were unchanged.

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