German Business Prosperity Index Continued to Drop

The Business Prosperity Index of August released by the German IFO Institute of Economics fell to 94.3 from 95.8 last month. This is the fifth consecutive month of decline in the key indicator of Germany's economic prosperity, the lowest since November 2012. Fister, director of the Ifo institute, said signs of a recession in Germany were increasing.

The IFO Economic Research Institute in Munich is the authoritative Economic Research Institute in Germany. The index, released by the Institute after a monthly survey of about 9,000 German business executives, is regarded as a barometer of the German economy. The business prosperity index in August shows that the degree of dissatisfaction with the current economic situation of German manufacturing enterprises interviewed has increased, and even appeared pessimism similar to that during the financial crisis in 2009. None of the key industries surveyed showed optimism about getting out of trouble. The prosperity index of service industry also declined significantly. In the trade sector, the boom index has changed from positive to negative due to the decline in bulk trade. At the same time, although the construction industry prosperity index also slightly declined, but the industry enterprises are relatively optimistic about the future months of prosperity.

"The worries of German business executives are deepening." Fister, director of the Ifo Institute of economics, said pessimism about the economic situation in the coming months had intensified and there were more and more signs of a recession in Germany.

Regarding the new low of German economic prosperity index in the past seven years, Klaus Borg, an economist at the Bank for Reconstruction Credit of Germany, said that Germany was on the verge of a "technological recession". The main factors that caused the pressure on the core sector of German economy, industry, included the sluggish world economy and the possible "nonexistence" of Britain. Agreements to break away from Europe"and the intensification of international trade disputes, etc.