German Firms See Brexit Clouds Approaching

German firms see Brexit clouds approaching

FRANKFURT,(APP - UrduPoint / Pakistan Point News -25th Augst,2016) - Germany is waking up to the threat of Brexit and could see weaker growth in 2017, analysts said on Thursday, after a key business confidence survey showed a sharp decline. The Ifo economic institute's closely-watched index fell to 106.2 in August from its July level of 108.3, reaching its lowest point since December 2014. Analysts surveyed by Factset had been expecting a slight rise to 108.5.

"The German economy has fallen into a summer slump," Ifo president Clemens Fuest said in a statement, noting that all sectors surveyed except construction had reported a drop in the index.

August's sharp drop contrasts with a smaller decline in July, when German business surprised forecasters by appearing to shrug off anxiety over Britain's late-June vote to quit the European Union. The latest correction was all the more unexpected after an investor survey by the ZEW institute in mid-August showed a recovery from the huge Brexit slump in confidence in July. Ifo's headline figure is produced from two figures representing companies' feelings on the current business environment and the outlook for the next six months.