Germany: Business Sentiment Plunges to Six-Year Low.

Germany’s Ifo Business Climate Index declined 1.9 points to 84.4 in April 2026, marking its lowest level since May 2020 during the COVID-19 pandemic and falling short of market expectations of 85.5. The decrease was mainly driven by a significant drop in future expectations, which fell to 83.3 from 85.9, highlighting growing concerns about the impact of the ongoing Middle East conflict on Germany’s already fragile economic recovery. Additionally, the assessment of current conditions also worsened, decreasing to 85.4 from 86.7. Sector sentiment in Germany has weakened across all major industries. Manufacturing fell to -15.5 (from -14.4), driven by pessimism in the chemical sector. Services dropped sharply to -11.0 (from -5.1), with logistics under particular strain. Trade plunged to -32.6 (from -24.6) amid fears of inflation curbing consumer spending, while construction declined to -24.0 (from -15.0) as recovery hopes faded.