German business confidence fell more than expected in June, but a recession is not yet in sight despite rising energy prices and the threat of gas shortages, a survey showed on Friday.
The Ifo Institute said its business climate index fell to 92.3 from a reading of 93.0 in May, as the indicator recorded an unexpected rebound despite the economic impact of the Russian-Ukrainian war.
A Reuters poll pointed to a drop to 92.9 in June.
“Despite increased uncertainty, there are no signs of recession at the moment,” Ifo expert Klaus Wohlrabe told Reuters.
“However, the threat of gas shortages has significantly increased uncertainty among companies.”
Not all sectors were suffering in the same way, as industry and retail suffered significant impacts while there was a clear improvement in the services sector, which is no longer affected by the lockdowns against Covid-19, the data showed.
However, supply bottlenecks — which are holding back automakers, for example — have eased only minimally and high inflation has continued to suppress consumer spending, Wohlrabe said.
Source: CNN Brasil
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