Economic Confidence Improves for German Businesses

January brought the first flicker of light to Germany’s economic prospects in eight months. The Business Climate Index published by the Munich-based economic research institute Ifo climbed 0.1 points in the first month of the year to 87.3 points. Most of the roughly 7,000 companies taking part in the survey rated both their present situation and their future prospects as marginally improved, but Ifo President Hans-Werner Sinn said the results represented more of a low-level stabilization than any clear trend. “All in all, it’s too early to extrapolate a tendency from the survey returns,” he said. According to the widely-accepted economic formula employed by Ifo, a movement must be maintained over three successive months before it is classified as a trend. Experts also point out that uncertainty and concern over the possible high economic cost of a war against Iraq is currently hampering any long-term recovery of business confidence.