2025.04.2410:12:00UTC+00German Ifo Business Sentiment Strengthens In April

German business confidence improved in April despite trade tariff uncertainty weighing on expectations, survey results from the the Munich-based ifo Institute revealed on Thursday.

The ifo business climate index rose to 86.9 points from 86.7 points in March. The score was forecast to fall to 85.1.

Companies were more positive about their current situation but their expectations were gloomier, ifo President Clemens Fuest said. Uncertainty among the companies has increased.

The German economy is preparing for turbulence, added Fuest. The current situation index logged 86.4 in April, up from 85.7 in the prior month. Moreover, the reading was above economists' forecast of 85.4.

By contrast, the expectations index declined to 87.4 from 87.7 a month ago. Still the reading remained above the expected level of 85.0.

The improvement in the business confidence suggests that US tariffs have not yet meaningfully hit economic activity in Germany, though some sentiment indicators have fallen sharply, Capital Economics economist Franziska Palmas said.

However, the economy is probably still stagnating and any growth this year will be very weak, the economist noted.

German businesses look rather unimpressed by recent trade tensions - at least for now, ING economist Carsten Brzeski said.

Although the survey data comes as a positive surprise, the economist cautioned against too premature optimism. Brzeski expects another year of stagnation, which would mark the first time ever for Germany to go through three consecutive years without growth.