The mood of self-employed workers deteriorated further in August, according to a survey by the Ifo Institute. The situation in the German economy is “tense”.
In Germany, the self-employed are increasingly aware that the economy is being pulled downwards. The relevant business climate index fell for the fifth consecutive month in August, the Munich Ifo Institute noted in its survey.
The barometer dropped to minus 19.9 points after minus 16.4 in July. “The situation in the German economy is tense,” said Ifo expert Katrin Demmelhuber, summarizing the results of the survey.
Ifo Institute: Lack of demand extends “dry spell”
First of all, dissatisfaction with existing jobs has increased significantly. However, expectations for the coming months continue to be pessimistic. In this environment, fewer and fewer self-employed people are said to be planning to increase their prices.
Even among service providers that have been relatively strong to date, the business climate barometer fell below zero for the first time this year. Business prospects and sales prospects were dimmed, and the assessment of the current situation was also worse.
“The drought period is getting longer due to lack of demand,” Demmelhuber said.
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Slight recovery in hospitality – retailers pessimistic
While the situation in the hospitality sector improved somewhat in August, there were significant declines in freelancers in the design, photography and translation sectors. Retailers are pessimistic about their future. The current business situation has worsened significantly.
The Ifo Institute assumes that the German economy, affected by inflation, rising interest rates and a weak global economy, will shrink by 0.4 percent this year.
Economists reduced their growth forecasts for 2024 from 1.5 percent to 1.4 percent. There should be an increase of 1.2 percent by 2025.
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