German corporate sentiment deteriorated in March to its lowest level since reunification in 1990, suggesting Europe's largest economy has yet to bottom out, a closely-watched survey showed today.
The Ifo economic research institute said its business climate index, based on a monthly poll of around 7,000 firms, fell to 82.1 from 82.6 in February.
The euro fell briefly against the dollar after the release of the data, before recovering to trade higher.
The German economy has made a weak start to 2009, with industrial orders slumping 8 percent and output by a record 7.5 per cent in January. Pointing to these declines, Commerzbank forecast on Monday a contraction in GDP of 6 to 7 per cent in 2009, easily the gloomiest outlook of any leading bank or think tank.
Reflecting the current weakness, an Ifo index of current conditions fell to 82.7 from 84.3 in February. A separate expectations index edged up to 81.6, its highest level since September 2008, from 80.9.
Economy Minister Karl-Theodor zu Guttenberg said yesterday the economy had not yet bottomed out while last week Ifo chief Hans-Werner said the economy would contract by over 4 per cent this year.
Reuters