Business confidence has dropped in Germany to its lowest level in more than two years amid pessimism over the eurozone’s deteriorating debt crisis, data show. According to the German research institute, Ifo, the country’s Business Climate Index fell to 102.3 points in August from 103.2 points in July, a larger decline than analysts had been expecting.
It is the fourth month in a row that the index has fallen in Germany, bringing business confidence down to its lowest level since April 2010."The German economy is continuing to falter," said Ifo president Hans-Werner Sinn. "The current business situation deteriorated only slightly, but companies expressed greater pessimism regarding future business developments." The index is calculated based on a survey of thousands of German firms in the manufacturing, construction, wholesale and retail sectors. Europe plunged into financial crisis in early 2008. Insolvency now threatens heavily debt-ridden countries such as Greece, Portugal, Italy, Ireland and Spain. The worsening debt crisis has forced EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries including Portugal, Spain, Greece and Italy. YH/HMV/HJL