Business morale in Germany hits highest level in over a year
FRANKFURT, Germany - German business morale rose to its highest level in over a year in July, a closely-watched survey showed on July 25, 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.
Top stories
Swipe. Select. Stay informed.
Singapore SMRT to pay lower fine of $2.4m for EWL disruption; must invest at least $600k to boost reliability
Singapore MRT service changes needed to modify 3 East-West Line stations on Changi Airport stretch: LTA
Singapore S'pore could have nuclear energy 'within a few years', if it decides on it: UN nuclear watchdog chief
Asia Live: Thailand-Cambodia border clashes continue for second day
Life 'Do you kill children?': Even before independence, S'pore has always loved its over-the-top campaigns
Singapore Lung damage, poor brain development, addiction: What vaping does to the body
Singapore Fine for couple whose catering companies owed $432,000 in salaries to 103 employees
Singapore Kopi, care and conversation: How this 20-year-old helps improve the well-being of the elderly
'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 Mr Trump, who has threatened a further blanket duty of 30 per cent on EU exports after Aug 1 if no agreement is reached. AFP
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
12 minutes ago
- Straits Times
German army prepares to develop deep-strike drones, Handelsblatt reports
Find out what's new on ST website and app. BERLIN - The German armed forces are preparing to develop long-range combat drones capable of striking targets deep in enemy territory, the Handelsblatt newspaper reported on Monday. Three consortia are working on concrete concepts after the Luftwaffe airforce sent a request for deep-strike drones to leading defence companies and startups, the report said. According to the report, Airbus Defence is contributing to the project alongside U.S. startup Kratos, while Germany's Rheinmetall has teamed up with drone specialist Anduril. Munich-based startup Helsing is also involved, the report said. The German defence ministry confirmed preparations for such a project to Handelsblatt, saying that initial talks had taken place but that no formal tender had been issued. The ministry and the companies mentioned did not respond to emailed requests for comment from Reuters. REUTERS
Straits Times
31 minutes ago
- Straits Times
US and EU avert trade war with 15% tariff deal
Find out what's new on ST website and app. US President Donald Trump meets with European Commission President Ursula von der Leyen, in Turnberry, Scotland, on July 27. TURNBERRY, Scotland - The United States struck a framework trade deal with the European Union on July 27, imposing a 15 per cent US import tariff on most EU goods, half the threatened rate, and averting a spiralling battle between two allies which account for almost a third of global trade. US President Donald Trump and European Commission President Ursula von der Leyen announced the deal at Mr Trump's luxury golf course in western Scotland after an hour-long meeting that pushed the hard-fought deal over the line, following months of negotiations. 'I think this is the biggest deal ever made,' Mr Trump told reporters, lauding EU plans to invest some US$600 billion (S$769.07 billion) in the United States and dramatically increase its purchases of US energy and military equipment. Mr Trump said the deal, which tops a US$550 billion deal signed with Japan last week, would expand ties between the trans-Atlantic powers after years of what he called unfair treatment of US exporters. Dr von der Leyen, describing Mr Trump as a tough negotiator, said the 15 per cent tariff applied 'across the board', later telling reporters it was 'the best we could get'. 'We have a trade deal between the two largest economies in the world, and it's a big deal. It's a huge deal. It will bring stability. It will bring predictability,' she said. The deal, which Mr Trump said calls for US$750 billion of EU purchases of US energy in coming years and 'hundreds of billions of dollars' of arms purchases, likely spells good news for a host of EU companies, including Airbus, Mercedes-Benz and Novo Nordisk, if all the details hold. Top stories Swipe. Select. Stay informed. Singapore Tanjong Katong sinkhole backfilled; road to be repaved after LTA tests Asia 4 killed in mass shooting in Bangkok: Thai police Singapore 'Medium risk' of severe haze as higher agricultural prices drive deforestation: S'pore researchers Singapore Jail for former pre-school teacher who tripped toddler repeatedly, causing child to bleed from nose Singapore Police statements by doctor in fake vaccine case involving Iris Koh allowed in court: Judge Singapore Woman allegedly linked to case involving pre-schooler's sexual assault given stern warning Asia Cambodia says immediate ceasefire purpose of talks; Thailand questions its sincerity Singapore SMRT reports unauthorised post on its X account, says investigation under way German Chancellor Friedrich Merz welcomed the deal, saying it averted a trade conflict that would have hit Germany's export-driven economy and its large auto sector hard. German carmakers, VW, Mercedes and BMW were some of the hardest hit by the 27.5 per cent US tariff on car and parts imports now in place. The baseline 15 per cent tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal. But Mr Bernd Lange, the German Social Democrat who heads the European Parliament's trade committee, said the tariffs were imbalanced and the hefty EU investment earmarked for the US would likely come at the bloc's own expense. Mr Trump retains the ability to increase the tariffs in the future if European countries do not live up to their investment commitments, a senior US administration official told reporters on July 27 evening. The euro rose around 0.2 per cent against the dollar, sterling and yen within an hour of the deal's being announced. Mirror of Japan deal Mr Carsten Nickel, deputy director of research at Teneo, said the July 27 accord was 'merely a high-level, political agreement' that could not replace a carefully hammered out trade deal. 'This, in turn, creates the risk of different interpretations along the way, as seen immediately after the conclusion of the US-Japan deal.' While the tariff applies to most goods, including semiconductors and pharmaceuticals, there are exceptions. The U.S. will keep in place a 50 per cent tariff on steel and aluminium. Dr Von der Leyen suggested the tariff could be replaced with a quota system ; a senior administration official said EU leaders had asked that the two sides continue to talk about the issue. Dr Von der Leyen said there would be no tariffs from either side on aircraft and aircraft parts, certain chemicals, certain generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. 'We will keep working to add more products to this list,' Dr von der Leyen said, adding that spirits were still under discussion. A US official said the tariff rate on commercial aircraft would remain at zero for now, and the parties would decide together what to do after a US review is completed, adding there is a 'reasonably good chance' they could agree to a lower tariff than 15 per cent. No timing was given for when that probe would be completed. The deal will be sold as a triumph for Mr Trump, who is seeking to reorder the global economy and reduce decades-old US trade deficits, and has already reached similar framework accords with Britain, Japan, Indonesia and Vietnam, although his administration has not hit its goal of '90 deals in 90 days'. US officials said the EU had agreed to lower non-tariff barriers for automobiles and some agricultural products, though EU officials suggested the details of those standards were still under discussion. 'Remember, their economy is US$20 trillion... they are five times bigger than Japan,' a senior US official told reporters during a briefing. 'So the opportunity of opening their market is enormous for our farmers, our fishermen, our ranchers, all our industrial products, all our businesses.' Mr Trump has periodically railed against the European Union, saying it was 'formed to screw the United States' on trade. He has fumed for years about the US merchandise trade deficit with the EU, which in 2024 reached US$235 billion, according to US Census Bureau data. The EU points to the US surplus in services, which it says partially redresses the balance. Mr Trump has argued his tariffs are bringing in 'hundreds of billions of dollars' of revenues for the US, while dismissing warnings from economists about the risk of inflation. On July 12, Mr Trump threatened to apply a 30 per cent tariff on imports from the EU starting on Aug 1, after weeks of negotiations with the major US trading partners failed to reach a comprehensive trade deal. The EU had prepared counter tariffs on €93 billion (S$140 billion) of US goods in the event a deal to avoid the tariffs could not be struck. REUTERS
Straits Times
42 minutes ago
- Straits Times
Several US executives to visit China this week: Sources
Find out what's new on ST website and app. A high-level delegation of American executives will travel to China this week to meet senior Chinese officials. BEIJING - A high-level delegation of American executives will travel to China this week to meet senior Chinese officials in a trip organised by the US-China Business Council (USCBC), two sources with knowledge of the visit told Reuters on July 28. The visit coincides with the latest round of US-China trade negotiations in Sweden , where China's Vice-Premier He Lifeng is meeting US officials from July 27 to July 30 for a new round of economic and trade talks. The delegation will be led by FedEx Chief Executive Rajesh Subramaniam, the council's board chair, one of the sources briefed on the trip said. The South China Morning Post first reported the visit on July 27, saying that executives from firms including Boeing would be part of the delegation. Reuters could not confirm other CEO members of the delegation or which Chinese officials they would meet. Boeing declined to comment on the trip and deferred to USCBC. The US government was not involved in the organisation of the visit, one of the sources said. The trip comes as Beijing and Washington work towards a summit between the two countries' leaders later in 2025, probably around the time of the Apec forum in South Korea October 26 - November 1, sources previously told Reuters. USCBC did not respond immediately to a request for comment. The business lobby previously organised similar visits to China by American CEO delegations in 2023 and 2024. The 2024 trip, also led by Mr Subramaniam, included meetings with Mr He and Foreign Minister Wang Yi, where executives discussed issues including market access. China faces an August 12 deadline to reach a durable deal with the White House or risk higher US tariffs. US officials are likely to extend the deadline by another 90 days as both sides work towards a more comprehensive deal, sources previously told Reuters. An extension of that length would prevent further escalation and help create conditions for the potential meeting between Mr Trump and Chinese President Xi Jinping. REUTERS
