The ifo Business Climate Germany index fell -0.9 pts to 84.7, the lowest level since May 2020 as expectations became more pessimistic. This was below expectations of no change in December. The current conditions index increased 0.8 pts to 85.1 but was offset by a -2.6 pt drop in the expectations index to 84.4 (vs 87.5 forecasted) which is the lowest since January.

Across the German business sectors, sentiment worsened with the aggregate index down -2.0 pts to -14.8. Manufacturing (-2.8 pts), the service sector (-2.1 pts), and construction (-2.9 pts) all saw significantly weaker readings. Only the trade sector saw an increase, growing 2.9 pts to -29.5. The Germany economy remains in crisis and somehow continues to deteriorate. The weakness is likely being compounded by its neighbors entering new periods of economic decline.