In May, the Ifo business climate index for German is expected to decline to 108.0, from 108.6 in April. A slowdown was already expected last month, after five consecutive increases, which did not take place due to a strong surge in the current assessment (while expectations declined slightly).
With increasing signs of economic conditions weakening in Germany, we should see some moderation in the Ifo business climate indicator from already high levels. The Ifo indicator is in fact signalling growth of around 0.7% qoq, whereas Q1 only came in at 0.3%. The Ifo could thus see a few more months of weakening before falling in line with Societe Generale's forecast of around 0.4-0.5% quarterly growth in Q2.
