German business confidence fell less than economists forecast in March, suggesting Japan’s earthquake and higher borrowing costs may not damp growth in Europe’s largest economy.
The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, declined to 111.1 from 111.3 in February, which was the highest reading since records for a reunified Germany began in 1991. Economists expected a drop to 110.5, according to the median of 39 forecasts in a Bloomberg News survey.
German investor confidence unexpectedly fell for the first time in five months in March after the European Central Bank said it may raise interest rates to curb inflation and Japan’s biggest earthquake on record caused a slump in global stocks. At the same time, Germany’s economy is booming as executives increase spending and hiring to meet export orders from emerging nations such as China.
