This morning’s better-than-expected rise in business confidence suggests Germany’s slowdown is over, according to Societe Generale’s Klaus Baader:
With a third successive gain, the ifo business climate index has performed a trend reversal, suggesting that the slowdown in the German economy has come to an end. Of course, a significant economic shock could knock the economy back onto a downward trend, but based on this survey, as well as the PMIs and the ZEW, the slowdown in Germany is over.
Germany is expected to show a 0.25% GDP slowdown for the fourth quarter, but it looks like it will do better this quarter, avoiding the two quarters of negative growth that constitute a recession.
Here’s a chart from SocGen showing Ifo business confidence and GDP growth: