Surprisingly, business confidence has risen in Germany despite Angela Merkel's difficulties in forming a government. This has put the country on track for a boom.
In a monthly survey of 7,000 businesses, especially in relation to forecasts, manufacturing companies, wholesalers and retailers all say that they were more upbeat about their prospects. The business climate index prepared by the IFO economic institute in Munich jumped to 117.5 for November from an upwardly revised reading of 116.8 last month. The numbers defied expectations having not been better since Germany reunited in 1990. The numbers were last at this level in West Germany in October 1969.
Although IFO stated that 90% of its survey responses had come before the collapse of talks on forming a coalition, questions were already being raised about the next government.
The president of IFO, Clemens Fuest, was upbeat in his outlook : ''The German economy is on track for a boom.'' His forecast of economic growth in the final quarter was 0.7 per cent, after 0.8 per cent in the period July to September. However, some analysts cautioned that politics in Berlin could yet be a dampener.
In a tweet, professor of macroeconomics at Humboldt University and president of the German Institute for Economic Research in Berlin, Marcel Fratzscher said,
''Germany's economy at a bliss point - historical high for IFO index - due to employment miracle (mainly thanks to large immigration from EU!) and strong exports.''
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