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Germany Ifo sentiment seen weakening as Iran risk and energy rise

Commerzbank expects the Ifo Business Climate Index to fall to 86.0 in August from 86.6 in July, while noting current-conditions measures have barely moved since the start of the Iran conflict.

Reported · Written up by our desk · Central Banks

FXStreet, citing Commerzbank economists Christoph Balz and Ralph Solveen, says Germanys Ifo Business Climate Index is expected to decline in August as renewed Iran war concerns and higher energy prices weigh on corporate expectations.

Commerzbank projects the headline index slipping from 86.6 in July to 86.0 in August, with the bank pointing to dashed hopes for a quick end to the war and renewed energy-price increases after the interim U.S.-Iran arrangement influenced earlier survey responses.

The economists add that sentiment remains fragile even though so far the impact on the current business situation appears limited, noting a subcomponent measuring current conditions has shown little net change since the war began.

They also warn that supply chain disruptions linked to low river levels could add further pressure, increasing uncertainty even as so-called hard data are described as relatively resilient.

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