Overview
- The Ifo business climate index slipped to 87.6 in December from 88.0 in November, its second monthly decline and below expectations for 88.2.
- Company expectations worsened, with survey responses signaling a gloomier view of the first half of 2026.
- Manufacturers report fewer new orders and plan to cut production, while services and trade deteriorated and construction remained weak.
- Retailers describe a disappointing Christmas season, whereas gastronomy stood out with a strong December.
- Analysts attribute the setback partly to missing broad reforms, noting that special federal funds are now available for infrastructure and defense as the Bundesbank projects slight Q4 growth ahead of a 2026 recovery.