German Business Outlook Declines in Blow to Merz’s Growth Pledge

German business confidence unexpectedly dropped, highlighting the fragility of Chancellor Friedrich Merz’s plan to restore growth in Europe’s biggest economy.

After four months of gains, an expectations index by the Ifo institute dropped to 89.7 in September from a revised 91.4 in August, a release Wednesday showed. Analysts polled by Bloomberg had predicted an increase to 92. A measure of current conditions also fell.