Frankfurt, March 18 (Bloomberg) -- German business confidence probably fell lastmonth amid concern among executives that weaker growth in the U.S. and Japanis crimping economic expansion in the Europe's largest economy, analysts said. The Ifo index of western German business confidence probably fell to 97 inFebruary from 97.5, according to the median estimate of 19 economists. Thatwould be the eighth decline in nine months. ``We should certainly be more pessimistic about the short- term future of theeconomy,'' said Lothar Hessler, an economist at HSBC Trinkaus in Dusseldorf.``German growth may well fall short of expectations this year.'' Germany's economy grew 0.2 percent last quarter, lagging neighbors France andItaly. Exports, which make up about a third of the country's gross domesticproduct, will expand at half last year's rate, the government estimates. TheEuropean Central Bank can't help much right now because officials have saidthey're more worried about rising inflation across the region. Chief economists from Germany's top 10 banks earlier this month cut theirforecast for German economic growth this year to 2.2 percent from 2.7 percent.The government expects about 2.75 percent growth. Growth in the euro zone will probably slow to 2.5 percent this year from 3.5percent last year, according to Deutsche Bank AG. That compares with expectedgrowth of about 1 percent in the U.S. economy this year.
Production, Inflation
The Ifo survey is released at 10:00 a.m. Wednesday, Frankfurt time. Based onresponses from about 6,000 executives, asks companies about production,inventories, orders, prices and employment. It gauges their view of currentbusiness conditions as well as expectations for the future. The report leads indicators this week that will probably show industrial productiondeclined in France and across the 12 nations that share the euro as theircurrency. French consumer spending -- which spurred the fastest economic growth in ayear last quarter -- probably also fell in February, a report on Thursday willprobably show, analysts said. The ECB, which has to keep inflation below an annual rate of 2 percent, left itskey interest rate unchanged at 4.75 percent at a meeting of policy-makers lastThursday. The next day, a report showed that euro zone consumer prices rose afaster-than-expected 2.6 percent in February, up from 2.4 percent in January. Lower inflation ``would increase the room for interest rate cuts,'' said StefanBielmeier, an economist at Deutsche Bank AG in Frankfurt. ``The ECB knowsthat an economic slowdown is coming, but inflation is still too high for it to act.'' A slower rate of inflation may be on the horizon, a report from Germany mayshow this week, analysts said. German consumer prices probably rose 0.1percent in the month to mid-March from the previous four-week period, based onthe median forecast of 19 economists surveyed by Bloomberg News. The annual inflation rate is seen at 2.5 percent, down from 2.6 percent inFebruary, the analysts said. The German inflation numbers are released on eitherThursday or Friday. The government hasn't set a specific time or date forpublication.
The following is a table with key European indicators expected to be released inthe week ahead. All times are Frankfurt times: Monday, March 19: No major releases scheduled. Tuesday, March 20: 8:45 French January industrial production 9:00 Italian fourth-quarter gross domestic product 10:30 U.K. February retail prices, February public borrowing, January/February balance of trade. 12:30 Italian March 12-city inflation Wednesday, March 21: 10:00 German February Ifo business confidence NoonEuro zone January industrial production Thursday, March 22: 8:45 French fourth-quarter pay 8:50 French Februaryconsumer spending 9:30 Dutch March consumer confidence, February producer confidence, Italian March consumer confidence. 15:55 Belgium February business confidenceTBA Six German states may begin to release preliminary March inflation figures. Friday, March 23: 8:45 French February consumer prices. TBA PreliminaryGerman March inflation may be released, based on the reports from six states.