German Business Confidence Rises in September

Business confidence in Germany improved to its highest level in more than two years in September, the Ifo economic institute reported on Monday.

The closely watched business climate index jumped from 106.3 points in August to 109.5 points in September. Beating economists’ prediction of 106.3.

Gauge for current business sentiment climbed to 114.7 from 113 in August. While confidence in the future outlook rose from 100.1 to 104.5.

Last week, after a slew of weak economic data, the Bundesbank cut down on its outlook for the German economy in the third quarter, citing weak exports and reduced business activities in the manufacturing sector of the euro zone’s biggest economy.

“After robust growth in the spring, Germany’s economy is likely to expand somewhat more slowly in the third quarter of 2016,” the central bank said in a monthly report. “This is in part reflected in the significant deterioration in corporate sentiment.”

“Economic indicators at the start of the quarter have been very weak, particularly in industry,” the Bundesbank said.

This was after purchasing manager index data showed that output dropped to 16-month low, with the services sector almost flat.

The European Central Bank President Mario Draghi, who will visit German parliament on Wednesday, said Germany should use its “fiscal space” for stimulus.

However, the Bundesbank said the economic trend is expected to remain strong in the long-term even if short-term challenges are piling up.