BERLIN, Dec. 17 (Xinhua) -- Germany's business confidence weakened again in December, figures from the ifo Institute showed on Wednesday, reinforcing concerns that Europe's largest economy may face another year of stagnation.
The ifo Business Climate Index fell to 87.6 points from 88 in the previous month, marking its lowest level since May.
"The year is ending without any sense of optimism," ifo President Clemens Fuest said, adding that companies have grown more cautious about the economic outlook, in particular for the first half of 2026.
While the construction sub-index remained unchanged at a low level, sentiment deteriorated across all other major sectors, including manufacturing, services and trade.
Manufacturers were particularly pessimistic about the outlook, citing falling orders and plans to scale back production, the institute said. Business sentiment weakened across almost all services segments except hospitality, while retailers reported disappointing Christmas-season sales.
After improving for much of the year, the ifo index fell for the first time in September and went on to record back-to-back declines in November and December.
Carsten Brzeski, global head of macro at ING, said the German economy has been on "an emotional roller-coaster ride" this year, swinging from optimism to caution. Hopes in the first half of the year had faded as announced fiscal stimulus measures progressed more slowly than expected, weighing on both business and consumer confidence. He added that external headwinds, including U.S. tariffs, added to the strain.
Brzeski noted the German economy could benefit from a cyclical rebound next year and move out of stagnation, but warned that the structural challenges holding back growth remain largely unresolved. ■
