Germany's business morale hits highest level in over a year
German business morale rose to its highest level in over a year in July, a closely-watched survey showed Friday, reinforcing hopes that Germany's struggling economy is slowly recovering.
The Ifo institute's confidence barometer rose slightly to 88.6 points, up from 88.4 a month earlier, its seventh straight increase and the highest level since May 2024.
The rise was, however, slightly smaller than that expected by analysts polled by financial data firm
FactSet.
'Sentiment among German companies has improved somewhat,' Ifo president Clemens Fuest said. But 'the
upturn in the German economy remains sluggish,' he
added.
Hit by high production costs as well as increasingly fierce Chinese competition for key exports such as cars, Europe's top economy was in the doldrums even before US President Donald Trump slapped it with new tariffs in April.
But new Chancellor Friedrich Merz has pressed ahead with tax breaks and massive spending plans in a bid to revive growth, and an uptick in data since the start of the year has boosted hopes that the worst might be over.
'A wave of optimism seems to have caught the German economy,' ING bank analyst Carsten Brzeski said, though he cautioned that Germany was 'highly affected' by trade tensions in the short-term.
US and European Union diplomats are currently negotiating ahead of the latest deadline set by Trump, who has threatened a further blanket duty of 30 percent on EU exports after August 1 if no agreement is reached.
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'It helps maintain Thailand's competitiveness on the global stage, boosts investor confidence and opens the door to economic growth, increased income and new opportunities,' Pichai Chunhavajira said. Cambodia The US on Friday slashed the tariff rate for Cambodia to 19 percent from earlier levies of 36 percent and 49 percent, a major boost for its crucial garments sector, its biggest economic driver and source of about a million manufacturing jobs. 'If the US maintained 49 percent or 36 percent, that industry would collapse, in my opinion,' Cambodia's Deputy Prime Minister and top trade negotiator Sun Chanthol told the Reuters news agency in an interview. European Union The EU's trade chief, Maros Sefcovic, said the bloc's exporters now benefit from a 'more competitive position' following a framework agreement between the EU and the US, although he added that 'the work continues. 'The new US tariffs reflect the first results of the EU-US deal, especially the 15 percent all-inclusive tariff cap,' Sefcovic wrote in a post on social media platform X. 'This reinforces stability for businesses as well as trust in the transatlantic economy,' he added. Switzerland Switzerland expressed 'great regret' that it was hit with 39 percent – up from the threatened 31 percent – despite its 'very constructive position'. The levy – more than double the EU's 15 percent – appeared to catch the rich Alpine nation off guard. Switzerland ranks sixth in terms of direct investment in the US, with pharma giants Roche and Novartis announcing major spending plans in recent months. Sri Lanka Sri Lanka expressed relief that it will face a 20 percent hit – a sharp reduction from the 44 percent originally floated – and expressed hope of a further cut. 'We are happy that our competitiveness in exports to the US has been retained,' Finance Ministry official Harshana Suriyapperuma told reporters. Bangladesh Bangladesh negotiated a 20 percent tariff on exports to the US, down from the 37 percent initially proposed by Trump. Muhammad Yunus, the head of the country's interim government, called it a 'decisive diplomatic victory'. Pakistan Pakistan secured a tariff rate of 19 percent with the US on Thursday. 'This deal marks the beginning of a new era of economic collaboration, especially in energy, mines and minerals, IT, cryptocurrency and other sectors,' the Pakistani Finance Ministry said in a statement. India Trump on Wednesday said Indian goods would face a 25 percent US tariff starting August 1, slightly below an earlier threatened level. The country would also face an unspecified 'penalty' over New Delhi's purchases of Russian weapons and energy, Trump said on social media. In a statement, the Indian government said on Wednesday it was studying the implications of these new tariffs and added New Delhi 'attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs'. South Africa South Africa will use the weeklong delay in the US's imposition of 30 percent tariffs to negotiate, to avoid the penalty and save jobs, President Cyril Ramaphosa said on Friday. 'Intensive negotiations are now under way,' Ramaphosa told journalists. 'Our task is to negotiate as strongly and as hard as we can with the United States,' he said. 'Our objective, really, is to save jobs.' Canada Trump said on Thursday that the US would raise tariffs on certain Canadian goods from 25 percent to 35 percent. He had warned of trade consequences for Canada after Prime Minister Mark Carney announced plans to recognise a Palestinian state at the United Nations General Assembly in September. Unlike the new levies hitting dozens of other economies, there is no delay, and these begin on Friday, according to a White House fact sheet. Carney said his government is 'disappointed' by Trump's decision. Trump's order also cited Canada's failure to 'cooperate in curbing the ongoing flood of fentanyl and other illicit drugs' as well as its 'retaliation' against his measures. Carney outlined Ottawa's efforts to crack down on fentanyl and to increase border security. 'Canada accounts for only 1 percent of US fentanyl imports and has been working intensively to further reduce these volumes,' he said. Products covered by the 2020 United States-Mexico-Canada Agreement – which covers a wide swath of items – will, however, be exempt from the tariff rate. Markets European stocks hit a three-week low as investors worried about the effect of the new US levies on dozens of countries. Asian shares were also headed for the worst week since April after the tariffs were announced. Oil prices have, however, changed very little, heading for a weekly gain.
