Indicating that Germany's economic upswing is coming to an end, the Ifo business climate indicator in July fell to its lowest level since September 2005 as firms became much more dissatisfied with their current business situation and pessimistic with their outlook for coming six months. Thursday, a report from the Munich-based Ifo research institute showed that its business climate index for Germany dropped to 97.5 in July from June's revised reading of 101.2. The current figure is the lowest since September 2005, when the index stood at 96.8. Economists had expected the indicator to decrease to 100.2. Earlier, the June reading was reported at 101.3. Commenting on the results of the latest survey, economist at BNP Paribas Economic Research Caroline Newhouse-Cohen said the latest data confirmed that growth kept on decelerating at the beginning of the summer.
The Ifo business assessment index that measures current situation in the largest Eurozone economy slipped to 105 from 108.3 and was lower than 106.5 predicted. Similarly, the expectations index decreased to 90 from June's revised reading of 94.6. Meanwhile, the consensus forecast was for 93.2. Ifo revised June's reading from 94.7.
Elsewhere, a flash PMI survey released by the Markit Economics showed that the composite index for Germany fell to 52.2 in July from 53.0 in June. The PMI for the service sector increased to 53.3 from 52.1 and that for the manufacturing sector fell to 50.9, its lowest level since August 2005. In mid July, the closely watched ZEW survey revealed that rising inflationary pressures, higher interest rates and fears of economic slowdown dragged Germany's investor confidence to a record low in July. The ZEW said in its report that the low level of the economic sentiment indicator reflects increased worldwide risks for economic activity.
On July 16, confirming its preliminary estimate, the Federal Statistical Office had said German annual inflation accelerated to 3.3% in June from 3% in May. This was the highest since December 1993.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.