FX.co ★ German Ifo business climate index rises more than expected in June

Germany’s Ifo business climate index surged to a record level in June, exceeding analysts’ expectations and suggesting robust economic activity in Germany.

In June, the nation’s business climate index rose to 115.1 from 114.6 in the previous month. Analysts had predicted a decline to 114.4.

According to the surveys of some 7,000 companies by the Munich-based institute, producers were going to increase their production amid strong demand and orders levels.

Last week, Ifo raised its growth forecasts for Germany and predicted record high employment levels. The institute said the country’s GDP growth would come in at 1.8% in 2017 versus 1.5% in its previous forecast. Germany’s economic growth would be 2% in 2018, it projected.

The Ifo report also forecast that inflation would jump to 1.7% in 2017 and to 1.6% in 2018. Unemployment would decline to 5.7% in 2016 from 6.1% in 2016, and to 5.5% in 2018. In their estimates, Ifo analysts took into account that the European Central Bank will begin to scale back its QE program next year.