Business Confidence Index for April falls in Germany
On the contrary to the anticipations of an increase, German business sentiment fell to 86.6 in April from 88.1 in March. This sharp drop of the business confidence to a 16-month low is seen as a result of the predictions of exports to slow down, raising worries that Germany's economy may contract. The executives' confidence, involving 7'000 companies participating in the IFO survey have not boosted for expectation of rising exports despite the war coming to an end. On the contrary the exports are expected to further decline, in view of falling factory orders, exports and retail sales in February. Exports account for one-third of Germany's gross domestic product, which saved the country's economy from shrinking last year. Therefore, today's expectations for lower exports are not welcomed. The Chancellor Schroeder is expected to cut growth forecast for this year down by 1%. The IFO index saw its peak in November 1990 at 107.4 and reached a low of 76.7 in 1982. The current situation indicates for most of the economists that the ending of the war is not a solution for the existing problems of German economy. The hesitant sentiment needs to be overcome for consumers to start spending and companies to make investments.