2012.05.24 10:34:40 DATA SNAP:German May Ifo Falls Sharply On Rising Euro-zone Uncertainty

By Margit Feher Of DOW JONES NEWSWIRES FRANKFURT (Dow Jones)--German business confidence fell sharply in May by more than expected, and after a rise for six months in a row, due to growing uncertainty in the euro zone, Germany's Ifo Institute said Thursday. The Munich-based think tank's closely watched business confidence index fell in May to 106.9 points from an unrevised 109.9 in April as firms expressed greater pessimism over their business outlook. The fall was deeper than analysts' expectations in a Dow Jones Newswires poll which expected a slight fall to 109.5. The Ifo survey of about 7,000 German companies engaged in industry and trade showed that the recent surge in euro-zone uncertainty after elections in France and Greece is affecting the German economy. "Assessment of the current business situation deteriorated. Nevertheless, the business outlook remains above the long-term average," Ifo President Hans-Werner Sinn said in a release. Ifo said the two sub-indexes that constitute the main index moved in sync in May. The sub-index assessing current conditions fell to 113.3 from 117.5, while the sub-index for business expectations decreased to 100.9 from 102.7 in April. German economic expectations as measured by the ZEW think tank of Mannheim also fell earlier this month in the wake of the French and Greek elections, which raised doubts over a resolution of the euro-zone's sovereign debt crisis. The ZEW index, based on a poll of 284 institutional investors and analysts, fell sharply as uncertainty increased as to whether Greece will stay in the euro zone. The euro zone would be able to cope if Greece backed out of its bailout program, the Bundesbank said Wednesday. The German central bank warned in its monthly bulletin that the fallout from a possible Greek exit from the currency bloc would be "considerable but controllable with careful crisis management." -By Margit Feher, Dow Jones Newswires; +49 69 29 725 509; margit.feher@dowjones.com (END) Dow Jones Newswires May 24, 2012 04:34 ET (08:34 GMT)