Germany’s Business Sentiment Shows Early Signs of Recovery

The latest Ifo Business Climate Index (BCI) suggests that the German economy may be stabilizing after months of weakness. The index rose to 88.4 in October, up from 87.7 in September, in line with market expectations of 88.0.

The improvement was driven by stronger business expectations, signaling growing optimism about future conditions, even as the current assessment component declined slightly. This shift implies that while companies still face near-term challenges, they are becoming more hopeful about medium-term prospects.

The data aligns with last week’s Composite PMI, which also indicated that Germany might be emerging from its slowdown. Economists view this as an early sign that Europe’s largest economy could begin a gradual recovery over the coming quarters, supported by easing inflation, resilient exports, and improving business confidence.