German business sentiment unexpectedly improves in May - Ifo

(Sharecast News) - German business sentiment unexpectedly improved in May, according to a survey released on Friday by the Ifo Institute. The business climate index rose to 84.9 from 84.5 in April, beating expectations for a drop to 84.2.

The current situation index printed at 86.1 in May, up from 85.4 the month before, while the expectations index edged up to 83.8 from 83.5.

Ifo Institute president Clemens Fuest said: "The German economy is stabilising for the time being, although situation remains fragile."

Carsten Brzeski, global head of Macro at ING, said the uptick in the business climate index was "no cause for relief".

"While German companies seem to have recovered somewhat from the first shock, the absolute level of the Ifo index remains weak," he said. "Yesterday, the latest PMI data already showed a high risk of the economy falling into contraction in the second quarter."