German business confidence slips in May: Ifo

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Business confidence in Germany slipped in May, the closely watched Ifo index showed Friday, disappointing expectations for an increase in Europe's top economy.

The index edged down to 101.5 points from 101.6 in April, an Ifo spokesman said.

Analysts surveyed by Dow Jones Newswires had looked for a small rise to 102 points.

Although a bitterly cold winter held German growth to a modest 0.2 percent in the first quarter of 2010, the economy is projected to grow by 1.4 percent this year.

The country is slowly recovering from its worst recession in more than six decades, with the economy shrinking by 4.9 percent in 2009.

In March, industrial output and orders both shot up and second-quarter exports are expected to benefit from the euro's fall against other major currencies owing to the eurozone debt and deficit crisis.

But government efforts to get their finances in order could well dampen eurozone economies later this year, economists warned.

© 2010 AFP

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