24 Jun 2015
German IFO hurt by Greece – ING
FXStreet (Edinburgh) - Analyst at ING Bank Carsten Brzeski assessed the recent poor results from the German IFO.
Key Quotes
“Creeping Greek fears. The number one topic in Germany has finally reached German businesses: the Greek crisis and fears of a Grexit. After a long period of stable business optimism, Germany’s most prominent leading indicator, the Ifo index, dropped to 107.4 in June, from 108.5 in May”.
“Even if the doses has been reduced somewhat, the German economy is still on steroids. Despite some recent rebounds, the weak euro exchange rate and low energy prices are still artificially extending the last phase of a very positive reform-growth cycle”.
“Even after today’s drop, the level of the Ifo remains comfortably high. In fact, comparing the levels of the second quarter with the levels of the first quarter suggests a growth acceleration of the German economy in Q2, confirming our positive growth outlook”.
“All in all, today’s Ifo index shows that German businesses are not immune against the Greek crisis and that Grexit fears are not only discussed in the local pub but also in boardrooms. However, for the time being, these fears should not (yet) have a negative impact on the economy”.
Key Quotes
“Creeping Greek fears. The number one topic in Germany has finally reached German businesses: the Greek crisis and fears of a Grexit. After a long period of stable business optimism, Germany’s most prominent leading indicator, the Ifo index, dropped to 107.4 in June, from 108.5 in May”.
“Even if the doses has been reduced somewhat, the German economy is still on steroids. Despite some recent rebounds, the weak euro exchange rate and low energy prices are still artificially extending the last phase of a very positive reform-growth cycle”.
“Even after today’s drop, the level of the Ifo remains comfortably high. In fact, comparing the levels of the second quarter with the levels of the first quarter suggests a growth acceleration of the German economy in Q2, confirming our positive growth outlook”.
“All in all, today’s Ifo index shows that German businesses are not immune against the Greek crisis and that Grexit fears are not only discussed in the local pub but also in boardrooms. However, for the time being, these fears should not (yet) have a negative impact on the economy”.