Good news for economy keeps coming

German business confidence rose for a fourth month in a row in August, data showed on Tuesday, exceeding expectations as companies in Europe's top economy continued to be buoyant.

Good news for economy keeps coming
Photo: DPA

The Ifo economic institute’s closely-watched business climate index rose to 107.5 points this month from 106.2 in July, in a move likely to provide a further boost to Chancellor Angela Merkel a month before general elections.

Analysts polled by Dow Jones Newswires had predicted an increase, albeit slightly lower, to 107 points.

“Companies are more satisfied with their current business situation. Their optimism regarding future business developments — although slightly cautious – also grew,” the think tank’s economist Kai Carstensen said in a statement. “The German economy moved up a gear.”

Ifo calculates its headline index on the basis of companies’ assessments of their current business and the outlook for the next six months.

With the battered eurozone now climbing out of recession, Germany’s manufacturing confidence rose significantly, reaching its highest level since April 2012, the Ifo indicator showed.

“Assessments of the current business situation were considerably better than last month. Business expectations also continued to brighten,” Carstensen said. “Firms expect stronger impulses from export business.”


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Spain’s inflation soars to 29-year high

Spanish inflation accelerated in November to its highest level in nearly three decades on the back of rising food and gas prices, official data showed Monday.

black friday spain
Black Friday sales can't disguise the fact for shoppers that life in Spain is getting increasingly expensive. Photo: GABRIEL BOUYS / AFP

Consumer prices jumped by 5.6 percent, up from a 5.4 percent increase in October, according to preliminary figures from national statistics institute.

That is its fastest pace since September 1992, when the rate was 5.8 percent.

The surge in inflation in the eurozone’s fourth-largest economy was due largely to a spike in food prices, followed by higher gas prices, the statistics office said.

Electricity costs, however, declined slightly after a month-long acceleration, it added.

As in other European Union nations, inflation in Spain has risen since the start of the year after consumer prices declined during most of 2020 due to the economic impact of pandemic lockdowns.

In October, eurozone inflation reached 4.1 percent, well above the European Central Bank’s target of two percent and equal to a high set in July 2008.

But the bank believes eurozone inflation will peak in November and is set to gradually slow next year as supply bottlenecks and the energy crunch ease, board member Isabel Schnabel said earlier this month.

Investors worry central banks will withdraw their stimulus measures sooner than expected to tame inflation.