Germany: ifo Business Climate Index Recovery in May Tells Partial Story

(2 June 2020)  Business sentiment improved in Germany in May, as reflected by the ifo Business Climate Index, which increased to 79.5 points from 74.2 in April. The uptick in the index was made possible by a sharp increase in business climate expectations. The bounce may be constrained, however, as many corporate leaders remain pessimistic about the business environment. The business situation index dropped slightly in May, and the ifo dispersion that measures uncertainty expectations among respondents increased in May.