MUNICH (Reuters) - The result of the German election on Sunday could stoke uncertainty among business, the chief economist of the Ifo economic institute said on Monday after business confidence deteriorated unexpectedly in September.
“At the moment people are still perplexed,” economist Klaus Wohlrabe said, adding that a so-called “Jamaica” coalition between Chancellor Angela Merkel’s conservatives with the Free Democrats and Greens would be difficult to achieve.
Wohlrabe said that new elections could not be excluded given the difficulty of forming a new government: “So uncertainty can certainly spread.”
Wohlrabe said that the German economy would probably be weaker in the third quarter than the first two, but overall 2017 would be a very good year.
Reporting by Alexander Huebner; Writing by Emma Thomasson; Editing by Madeline Chambers