German business confidence fell for a second month in January in a sign that companies in Europe’s largest economy are increasingly worried about slowing global growth.
The Ifo Institute’s business climate index dropped to 107.3 from a revised 108.6 in December. The median estimate in a Bloomberg survey of economists was for a decline to 108.4.
German manufacturing is increasingly at risk from a slowdown in global trade, with the weakest Chinese economic growth in more than two decades throwing markets into turmoil and the IMF downgrading its outlook for 2016.
Even so, the Bundesbank remains confident that exports will rise and predicts that low interest rates and falling unemployment continue to support domestic demand.
“Greater international economic risks, especially the uncertainty about the Chinese economy, are impairing business expectations, especially in export-dependent manufacturing,” economists at DZ Bank in Frankfurt wrote in a client note ahead of the release.
German investor confidence fell for the first time in three months in January and the Dax index has fallen more than 10% since the beginning of December.
GDP rose 1.7% in 2015 The Bundesbank forecast in December the economy would expand 1.8% this year and 1.7% next.
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