Positive German Business Confidence as Economy Strengthen
German firms are preparing for a bountiful period on the back of a slackening summer season.
Business climate of the Germany boosted for the sixth month in July, claimed by the Ifo Institute. According to the poll, which includes 7,000 companies under the construction, manufacturing and trade sector around Europe’s biggest economy, the index increased to 116.0 which is adjusted from 115.2 last month. This was the highest level recorded for almost 26 years, compared with the Bloomberg’s median estimate showing a decline to 114.9.
The euro moved higher following the issued data and continued to trade at $1.1660 at 10:24 a.m. Frankfurt time.
Ebullient sentiment shows that the economy of Germany had performed strongly earlier this year and bound to run over until the second half.
The continuous decline in unemployment had supported the domestic demand as the Bundesbank projected that the “lively” demand for exports will lead the manufacturing as a major growth driver.
Clemens Fuest, Ifo President, said that “Sentiment among German businesses is euphoric”, citing that the German economy will stimulate ahead.
Moreover, the country moved at a fast pace in a year during the Q1 while the International Monetary Fund is confident enough towards the nation’s growth outlook after upgrading its forecast for 2018 in the past months.
The organization further mentioned that the development for 2017 is 1.8 percent and 1.6 percent in 2018, bolstered by the strong domestic demand and stabilized international trade.
The Ifo gauges the present economic situation will gain 125.4 from the adjusted 124.2 and the measures of confidence will expand to 107.3 from 106.8.
The GDP figures for the month of April to June is going to release on August 15.
Japan Producer Prices +0.8% In June
Producer prices in Japan were up 0.8 percent on year in June, the Bank of Japan said on Wednesday - unchanged and in line with expectations.
On a monthly basis, producer prices fell 0.1 percent following the flat reading in May.
Individually, prices were up for transportation and advertising; they were down for leasing and rental.
For the second quarter of 2017, producer prices were up 0.8 percent on year and 0.4 percent on quarter.
IMF Cut Growth Forecast for US Economy
The International Monetary Fund downgraded its growth outlook for the United States due to concerns regarding Trump’s capacity to carry out his promises to the economy to stir the American economy.
Although the Washington-based organization provided a positive forecast in April, they had trim it down to 2.1 percent for this year and based on earlier projections for 2018, the US economy will gain 2.3 and 2.5 percent growth.
While the global growth was held at 3.5 percent in 2017 and 3.6 percent for the next year according to the prediction of IMF managing director Christine Lagarde and described it as "quite well anchored".
However, based on the World Economic Update, the IMF mentioned about the uncertainty towards the policies of President Donald Trump since it is a major factor in the leery growth projections for the US.
Pres. Donald Trump got the presidential position six months ago, citing his plans about tax reductions, looser regulation and major infrastructure spending which triggered a rally on Wall Street. But the policies were stalled in the US Congress as the government continues to battle over other issues, like health care reform.