The Ifo Institute's survey showed that sentiment among the German companies improved slightly in April and reached the highest level since July 2024, despite the uncertainty surrounding Donald Trump's tariff policy.
According to the report, the Ifo business climate index rose to 86.9 from 86.7 in March. Economists had expected the index to decline to 85.2 points.
The details of the report showed that the current situation sub-index increased to 86.4 points from 85.7 points in March, while economists predicted a decline to 85.4. Meanwhile, the expectations index, which measures the six-month outlook from the business perspective, declined to 87.4 from 87.7 in March. Consensus estimates suggested a drop to 85.0 points.
Earlier this week, the German government cut its economic forecast for this year and now foresees stagnation instead of 0.3% growth. For 2026, the government now expects growth of 1%, down slightly from its January forecast of 1.1%. Earlier this month, German economic institutes cut their growth forecast for this year to 0.1% from the 0.8% expected in September, taking into consideration initial U.S. tariffs on steel, aluminium and cars.