German Business Sentiment Rises Modestly in July

The Ifo Business Climate Index for Germany edged up to 88.6 in July 2025, from 88.4 in June, marking the highest reading since May 2024.

However, the result came in slightly below market expectations of 89.0, suggesting that business sentiment remains cautious and the economic recovery in Europe's largest economy continues at a sluggish pace.

The improvement was driven by a marginal uptick in both current assessments (86.5 vs 86.2) and business expectations (90.7 vs 90.6), indicating firms are becoming slightly less pessimistic about economic conditions.

Across industries, sentiment improved among manufacturers (-11.8 vs.

-13.9) and constructors (-14.0 vs.

-15.1), but weakened among service providers (2.7 vs.

3.8) and traders (-20.2 vs.

-19.2).