Germany’s Ifo Business Climate Index rose to 89.9 in September 2026, up from 88.8 in August and comfortably above the market consensus of 89.0. This was the highest reading since May 2023 and the fifth consecutive monthly increase, indicating that business sentiment in Europe’s largest economy continues to improve despite an energy price shock that has driven fuel costs to record highs. Both components of the index strengthened over the month. The expectations index climbed to 90.4 from 89.0, reflecting greater optimism about the economic outlook in the coming months. At the same time, the current conditions index increased to 89.5 from 88.5, signaling a modest improvement in firms’ assessment of the prevailing business environment.