The Ifo Institute's survey showed that sentiment among the German companies unexpectedly deteriorated in December, reaching its lowest level since September. Overall, the data signaled that increased price pressure and declining demand remain two problematic issues for the German economy.
According to the report, the Ifo business climate index fell to 86.4 from 87.2 in November (revised from 87.2). Economists had expected the index to rise to 87.8 points.
The details of the report showed that the current situation sub-index dropped to 88.5 (lowest level since August 2020) from 89.4 in November. Economists had expected a rise to 89.7. Meanwhile, the expectations index, which measures the six-month outlook from the business perspective, fell to 84.3 (3-month low) from 85.1 in the previous month (revised from 85.2). Consensus estimates suggested an increase to 85.9 points.