The IFO Business Climate Index for Germany fell in April to 84.4, down from 86.4 in March, missing market expectations of a rise to 85.7. The index, which is based on a survey of nearly 9,000 German companies, reached its lowest level since May 2020, reflecting business pessimism about the coming months and the impact of the Middle East conflict on the German economy.

Specifically, the current situation index fell to 85.4 from 86.7 in March, while the expectations index dropped to 83.3 from 85.8 in March.

At the sector level, the manufacturing index fell to -15.5 from -14.4 in March, the services index to -11.0 from -5.1, and the construction index to -24.0 from -15.0.