German economy slowed by supply bottlenecks, COVID-19 concerns: ifo Institute
Sentiment in the German economy "clouded over" as the business climate index in July slightly fell to 100.8 points, the ifo Institute announced on Monday.
Expectations for the coming months were "significantly less optimistic," the ifo Institute noted. Supply bottlenecks as well as concerns over newly rising COVID-19 infection numbers were "weighing on the German economy."
However, German companies assessed the current business situation as "somewhat better" than in June, with the corresponding subindex rising from 99.7 points to 100.4 points, according to the monthly survey of around 9,000 managers.
In the manufacturing sector, the overall index fell as the industry took a more pessimistic view of the future for the fourth time in a row, according to the ifo Institute. At the same time, manufacturing companies assessed their current business situation better than at any time since August 2018.
The indices of the service and trade sectors fell due to a lack of optimism about the future. Many experts are fearing COVID-19 figures in Germany could rise significantly again. Only the country's construction sector saw the overall ifo business index rise.
The 7-day incidence rate of new COVID-19 infections in Germany almost tripled since early July and reached 14.3 per 100,000 people on Monday, up from 13.8 per 100,000 people on the previous day, according to the Robert Koch Institute (RKI) for infectious diseases.
"If this trend continues, we will have to take additional measures," said deputy government spokeswoman Ulrike Demmer on Monday.
Meanwhile, the country's COVID-19 vaccination campaign has been slowing down lately. On Sunday, only 30,671 first doses of vaccine were administered, the lowest daily tally since Feb. 7, the RKI noted.
As of Monday, almost 41.1 million people in Germany have been fully vaccinated, bringing the country's vaccination rate to 49.4 percent. More than 50.6 million people have received at least one vaccine dose.