German business confidence rose for the third month in a row this month, a key survey said yesterday, as Europe’s top economy bounced back from COVID-19 lockdowns.
The Munich-based Ifo Institute for Economic Research’s monthly barometer rose to 90.5 points, up from 86.3 last month, beating analyst’s expectations.
“The German economy is recovering step by step,” Ifo president Clemens Fuest said.
The index plunged to a record low in April, when Germany’s coronavirus containment measures closed factories and shops, before starting a rebound in May as economic activity gradually resumed.
The Ifo index, based on a survey of 9,000 firms, found that companies were more satisfied with their current situation and more optimistic about the future this month.
The mood was especially improved among retailers and service providers as consumers returned to restaurants, shops and tourist sites.
Germany has fared relatively well in the COVID-19 pandemic compared to many of its neighbors, but concerns are growing that holidaymakers returning from abroad could fuel a second wave of infections.
“It is too early to give the all-clear,” KfW chief economist Fritzi Koehler-Geib said. “The pre-crisis level will remain a long way off for the foreseeable future, and the continuing fierce rage of the pandemic in large parts of the world is an enormous risk for Germany as an export nation.”
Separately, Germany’s benchmark 10-year bond yield yesterday dipped in a sign that unease in world markets over rising US-China tensions was driving investors into safe-haven assets.
China took over the premises of the US consulate in the southwestern city of Chengdu, after ordering the facility to be vacated in retaliation for China’s ouster last week from its consulate in Houston, Texas.
The worsening relations between the world’s two biggest economies boosted safe havens such as gold and government bonds, allowing German debt to recover from price losses on Friday sparked by stronger-than-expected purchasing managers’ index data.
Germany’s 10-year bond yield was last down about 1.5 basis points at minus-0.456 percent, having risen 4 basis points on Friday.
Additional reporting by Reuters
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