Germany’s Ifo Business Climate Index rose to 89.9 in September from 88.8 in August, extending its gains to a fifth consecutive month and reaching its highest level since May 2023. The reading, based on around 9,000 monthly business responses, slightly exceeded the 89.0 consensus forecast cited by The Wall Street Journal. The expectations index increased to 90.4 from 89.1, while the current conditions measure rose to 89.5 from 88.5. The result was the third indication that a long-awaited recovery may be taking hold, following flash PMI data showing the fastest expansion in German business activity in almost a year. Germany’s five leading economic institutes raised their 2026 growth forecast to 1.3% from 0.6%. The improvement comes as record fuel costs weigh on households and businesses, while Chancellor Friedrich Merz’s government plans to cut fuel taxes by €0.17 ($0.19) a litre from October 1 through year-end.