Japan quake hits German business sentiment: Ifo

25th March 2011, Comments 0 comments

Germany's Ifo indicator of business confidence fell in March for the first time since May on worries about Japan's earthquake and nuclear crisis, the Ifo institute said Friday.

The closely watched index inched down to 111.1 points from 111.3 in February after nine consecutive monthly rises. The fall was however not as steep as feared by economists, who had forecast on average a drop to 110.5 points.

"Almost half the responses (for the survey) came in after the disaster in (Japanese nuclear plant) Fukushima," the Ifo institute said in a statement.

"All in all, however, firms in Germany remain very confident. The business situation is even better than before ... Germany is in an upswing."

Jonathan Loynes, chief Europe expert at Capital Economics, said that "while the economy retains a considerable amount of momentum, there are tentative signs that the rate of recovery may have reached a peak."

He cautioned not to read too much into the fall, however, retaining his forecast of three-percent growth in Europe's biggest economy this year.

"Nonetheless, coupled with declines in other recent survey indicators such as the ZEW, the fall perhaps provides the first sign that the super-strong recovery in the Germany economy is starting to lose a little bit of steam."

© 2011 AFP

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