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Business Mood Ticks Up as Consumer Confidence Drops, Ifo Chief Urges Rapid Reforms

The upcoming Q3 GDP release will be read as an early test of a possible turn in Germany’s economy.

Overview

  • The Ifo business-climate index rose to 88.4 in October from 87.7, driven by improved expectations even as firms rated the current situation slightly worse.
  • Survey detail showed brighter outlooks in industry, services and trade, with a continued order shortfall and weak capacity use highlighting ongoing strain.
  • GfK/NIM reported the consumer climate for November at −24.1, as income expectations fell to 2.3 points, the lowest since March, weighing on spending plans.
  • Ifo president Clemens Fuest warns of a multi‑year decline marked by higher state consumption and depressed corporate investment, and he calls for a reform plan by spring 2026.
  • Fuest’s proposals include halting the Mütterrente and cutting documentation rules he estimates could free up as much as €146 billion annually, drawing CDU support and social‑welfare pushback.