3/03/2016

German Confidence Dropping


German business confidence suffered its steepest drop since 2008, according to a widely watched survey by Ifo institute.

The fall, the third in a row, left the Ifo business climate index at 105.7 from 107.3 in January. Economists had forecast a slip to 106.8.

The fall is being blamed on a drop in demand for German goods in emerging markets.

It leaves business morale at its lowest level in more than a year. 

The survey, which is based on monthly responses from around 7,000 firms in Germany, suggests that companies are concerned about the economic outlook for the next six months. 

Europe's largest economy has suffered from a drop in demand from emerging markets in Asia and Latin America, 

Carsten Brzeski of ING Bank said the numbers were a "wake up call". He added that "global events have finally reached German companies' boardrooms".

German companies have been relying on a strong US economy to offset the falling exports to China, Brazil and other emerging markets.

Ifo President Hans-Werne Sinn said the outlook for the German economy was worrying.

"The majority of companies were pessimistic about their business outlook for the first time in over six months."

Germany is the largest national economy in Europe, the fourth-largest by nominal GDP in the world, and fifth by GDP (PPP). 

The country is a founding member of the European Union and the Eurozone.

The socio-economic policy of Germany is based on the concept of the social market economy.

Germany is rich in timber, iron ore, potash, salt, uranium, nickel, copper and natural gas. 

Energy in Germany is sourced predominantly by fossil fuels (50%), followed by nuclear power second, then gas, wind, biomass (wood and biofuels), hydro and solar. 

Germany is the first major industrialized nation to commit to the renewable energy transition called Energiewende. 

Germany is the leading producer of wind turbines in the world. Renewables now produce over 27% of electricity consumed in Germany.

Angela Merkel, Germany's first female chancellor, won a third term in September 2013, leading her conservative Christian Democrats (CDU) to victory and only narrowly failing to secure an outright majority.

The CDU's election campaign focused on Mrs Merkel's image as a safe pair of hands amid financial turmoil in Europe.

Germany's competitive television market is the largest in Europe, with some 34 million TV households.

The many regional and national public broadcasters - organized in line with the federal political structure - vie for audiences with powerful commercial operators. 

Each of the 16 regions regulates its own private and public broadcasting.

Around 90% of German households have cable or satellite TV, and viewers enjoy a comprehensive mix of free-to-view public and commercial channels. 

This has acted as a brake on the development of pay-TV.
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