German business sentiment

improved in line with market expectations in January, according to the latest report by the Ifo Institute released on Wednesday, another sign that Europe’s largest economy may avoid a recession. The Munich-based institute’s Business Climate Index rose to 90.2 points from 88.6 points in December, showing “considerably less pessimistic expectations” among manufacturers and companies in the service sector.

^{Ifo Institute}

• On that note: The German government revised up its economic forecast to grow by 0.2% this year from a 0.4% decline, according to its annual economic report published on Wednesday. Inflation is seen at 6% in 2023, down from the previous 7% prediction, as energy prices ease following the initial shock of the energy crisis triggered by the Ukraine war.