Germany’s export-dependent economy continues to benefit from a solid acceleration in economic activity in Asia. The IFO Business Climate Index improved for the fifth-consecutive month, rising from 87.4 in July to 90.5 in August.
Europe’s largest economy was hit extremely hard by the recession, but GDP unexpectedly improved in 2Q amid gains overseas. Headwinds remain, including problems in the banking industry, but conditions appear to be stabilizing as business confidence improves.
Based on the graph below, manufacturing appears to be entering an upswing. Still, without a solid recovery in the US, prospects for the economy will likely be limited.
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