German, French Business Confidence Jumps as Lockdowns Ease
German business confidence climbed to the strongest in more than two years in June, echoing a jump in France as the lifting of some pandemic restrictions allows services to resume activity.
The Ifo institute’s business climate index rose to 101.8, beating economists’ estimates. A gauge of German business expectations for the next six months surged to the highest in more than a decade, and a measure of current conditions also improved.
A separate report showed French business confidence jumped to the highest since 2007, led by services.
Europe’s two largest economies are on track for a strong upswing after contractions in the first quarter. Consumers are starting to visit restaurants and shops again after months of stringent lockdown, coronavirus infections have dropped, and half the population in each country now has at least one vaccination.
Germany’s Bundesbank said earlier this week that it expects a strong increase in economic output, and that supply strains facing the country’s important manufacturing sector are likely to have a limited impact. It raised its forecasts for economic growth earlier this month, and now anticipates an expansion of 3.7% in 2021.
The Bank of France predicts the French economy will be back to pre-crisis levels by early next year.
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