According to the report from ifo Institute, German Business Climate Index drops sharply in January - to 90.1 from 92.2 in December. Economists had expected a decrease to 91.8. The Current Economic Assessment declined to 89.2 compared to last month's 91.3 and 90.6 anticipated. The IFO Expectations Index – indicating firms’ projections for the next six months, eased to 91.1 from the previous month’s 93.0 reading and worse than the market expectations of 93.2.

Following the release, the institute’s Economist Klaus Wohlrabe said that the economy is starting the new year with little confidence.

“We expect GDP stagnation in Q1. Industry continues to be well-positioned, wants to make more, export expectations have risen. Many service providers are also affected by lockdown, including transport and logistics.”