Overview
- Germany’s Ifo business climate fell to 87.6 in December, its weakest reading in seven months, signaling persistent stagnation.
- Ifo respondents reported declining new orders, plans to scale back production, and disappointing Christmas sales in retail.
- Investor expectations in the ZEW survey jumped to 45.8 in December, contrasting with a worsening current-situation assessment at minus 81.0.
- The government has approved higher spending on defence and infrastructure, though surveys indicate the boost has not yet shown up in activity.
- Leading institutes now see 2026 growth at roughly 0.8% to 1.0%, below the government’s 1.3% forecast, as ZEW’s Achim Wambach cautions the recovery remains fragile.