Ifo Survey (Aug 2020) Preview - 0900BST 25/8/2020

Ifo BUSINESS CLIMATE (BC): Bbg Cons: 92.4; Prev (Jul): 90.5

Ifo CURRENT SITUATION (CS): Bbg Cons: 87.0; Prev (Jul): 78.9

Ifo EXPECTATIONS: Bbg Cons: 98.1; Prev (Jul): 84.5

• The Ifo business climate index is projected to edge higher to 92.4 in Aug up from 90.5 in in Jul, which would mark the fourth consecutive increase and the highest level since Feb.
• Both the expectations index as well as the current conditions index are forecast to tick up.
• After plummeting in Apr, expectations recovered quickly and reached the pre-crisis level already in Jul and markets project the index to rise 1.1pt to 98.1 in Aug.
• On the other hand, current conditions still show readings below levels seen before the crisis.
• Nevertheless, the index is expected to rise further to 87 in Aug, up from 84.5 in Jul.
• Similar to other indicators, the outlook is dependent on the development of the pandemic which poses a downside risk in coming months.
• The recently released flash PMI for Germany showed a decline for the composite as well as the services PMI in August mainly due to a drop of service sector business activity.