German business confidence falls for second month in row
German business confidence fell in April for the second consecutive month, according to a closely-watched survey.
The Ifo think tank said its business climate index, based on a survey of about 7,000 firms, fell to 104.4 in April, down from 106.7 in March. The survey sent the euro to its lowest against the dollar in nearly three weeks on worries about the strength of Europe's largest economy. Germany's economy had been the growth engine amid the eurozone crisis. "The sharp dip in Germany's Ifo index marks another nail in the coffin for stronger recovery this year," said David Brown, at New View Economics. The Ifo numbers follow a purchasing managers' survey showing the country's private sector contracted in April. Next week, the European Central Bank meets to decide interest rate policy, and there is growing speculation that policymakers may cut rates. Worries about economic growth in China and the bailout in Cyprus have underlined the fragile global economic environment, and some big German firms, including BASF, Bosch, and Daimler have posted downbeat financial results. Carsten Brzeski, economist at ING, said: "The full impact of the Cyprus bailout and new concerns about global growth have led to a clear downward revision of German business expectations. "If this trend continues, pressure could build on the German government to consider fiscal stimulus. This time not so much for the sake of any eurozone rebalancing but for the sake of pure economic selfishness," he said.