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The Ifo Business Climate Index is a widely followed early indicator of economic development in Germany. It is based on approximately 9,000 monthly survey responses from firms in manufacturing, the service sector, trade, and construction. Companies are asked to give their assessments of the current business situation and their expectations for the next six months. It is considered one of the most reliable barometers for the health of the German economy.
The index is calculated as a geometric mean of the assessments of the current business situation and business expectations. The survey results are balanced (positive minus negative responses) and then normalized to a base year.
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