German business sentiment held steady at a low level in January, a survey showed Monday, with firms still pessimistic about any sustained recovery in Europe's biggest economy.
The Ifo institute's confidence barometer came in at 87.6 points, weaker than some forecasts and the same reading as December when it slipped to its lowest for months.
"The German economy is starting the new year with little momentum," said Ifo president Clemens Fuest.Â
Hammered by a manufacturing slump, fierce competition in key export markets and US tariffs, the German economy has been mired in a long decline.
After meagre growth in 2025 following two years of recession, some have been banking on the turnaround picking up speed sharply this year driven by a public spending blitz.
But the Ifo survey, in which about 9,000 businesses are polled every month, tempered hopes that the eurozone's traditional powerhouse is about to race out of the blocks.
The climate in the service sector deteriorated, with businesses assessing their current situation and expectations for the future as worse, it showed.Â
The readings in the manufacturing, trade and construction sectors all ticked up.
"The weaker-than-expected German Ifo in January pours some cold water on expectations that the German economy might be finally turning the corner," said Franziska Palmas, senior Europe economist at Capital Economics.
"We think the recovery will be slower than most anticipate."
The government is forecasting growth of 1.3 percent this year, supported by a debt-fuelled spending bonanza on defence and infrastructure.
But, with worries growing that spending will not be accompanied by much-needed reforms, some economists have in recent times downgraded their forecasts to between 0.8 and one percent expansion for 2026.
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...COLD WEATHER ADVISORY REMAINS IN EFFECT UNTIL 10 AM CST MONDAY...
...COLD WEATHER ADVISORY REMAINS IN EFFECT FROM 9 PM MONDAY TO 9 AM
CST TUESDAY...
* WHAT...For the first Cold Weather Advisory, very cold wind chills
as low as 2 above expected. For the second Cold Weather Advisory,
very cold temperatures as low as 8 above expected.
* WHERE...A portion of central Alabama.
* WHEN...For the first Cold Weather Advisory, until 10 AM CST
Monday. For the second Cold Weather Advisory, from 9 PM Monday to
9 AM CST Tuesday.
* IMPACTS...Frostbite and hypothermia will occur if unprotected skin
is exposed to these temperatures. An extended period of
subfreezing temperatures could cause pipes to burst.
PRECAUTIONARY/PREPAREDNESS ACTIONS...
Use caution while traveling outside. Wear appropriate clothing, a
hat, and gloves.
Keep pets indoors as much as possible.
Make frequent checks on older family, friends, and neighbors. Ensure
portable heaters are used correctly. Do not use generators or grills
inside.
To prevent freezing and possible bursting of pipes they should be
wrapped, drained, or allowed to drip slowly.
&&
...COLD WEATHER ADVISORY REMAINS IN EFFECT UNTIL 10 AM CST MONDAY...
...COLD WEATHER ADVISORY REMAINS IN EFFECT FROM 9 PM MONDAY TO 9 AM
CST TUESDAY...
* WHAT...For the first Cold Weather Advisory, very cold wind chills
as low as 2 above expected. For the second Cold Weather Advisory,
very cold temperatures as low as 8 above expected.
* WHERE...A portion of central Alabama.
* WHEN...For the first Cold Weather Advisory, until 10 AM CST
Monday. For the second Cold Weather Advisory, from 9 PM Monday to
9 AM CST Tuesday.
* IMPACTS...Frostbite and hypothermia will occur if unprotected skin
is exposed to these temperatures. An extended period of
subfreezing temperatures could cause pipes to burst.
PRECAUTIONARY/PREPAREDNESS ACTIONS...
Use caution while traveling outside. Wear appropriate clothing, a
hat, and gloves.
Keep pets indoors as much as possible.
Make frequent checks on older family, friends, and neighbors. Ensure
portable heaters are used correctly. Do not use generators or grills
inside.
To prevent freezing and possible bursting of pipes they should be
wrapped, drained, or allowed to drip slowly.
&&
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