German firms dim view

Source: Agencies  |   2009-2-25  |     NEWSPAPER EDITION

GERMAN business confidence slipped in February, with a grim economic situation weighing on sentiment even as a government stimulus plan helped pep up firms' outlook for the future, a closely watched survey showed yesterday.

The Ifo institute's monthly index declined to 82.6 points in February from 83 last month. That wiped out a slight gain in January, which followed seven consecutive months of declines, and defied economists' predictions that the index would remain static or rise slightly.

Germany's economy, Europe's biggest, went into recession last fall as the global economic crisis sapped demand for its exports. The recession deepened in the fourth quarter, when the economy shrank by 2.1 percent.

Ifo said companies' view of their current situation darkened for the fourth straight month. A subindex measuring that view slipped to 84.3 points from 86.8.

However, expectations for the next six months showed their second consecutive improvement, climbing to 80.9 points from 79.5.

"The expectations of the firms remain basically skeptical, nevertheless," Ifo president Hans-Werner Sinn said in a statement. "On the whole the survey results do not signal a cyclical turning point."