The sentiment in the German economy continued to deteriorate in April but remains at a still quite high level. The Ifo Business Climate Index recorded its fifth consecutive decline – actually an indication of an incipient downturn. In our opinion, however, the presumably weak growth in Q1 was probably mainly the result of one-off effects such as a high level of sick leave and strike-related losses and thus only temporary. The economic momentum is likely to pick up again somewhat in Q2. Even though some indicators such as industrial production and incoming orders recorded declines at the start of the year, the economic situation remains favorable overall. Despite the sharp fall in January, the industrial order backlog in February was still well above the level in Q4 2017. The labor market continues to develop favorably, too. The number of unemployed keeps on declining significantly and employment continues to rise sharply – good conditions for a clear increase in private consumption this year. Overall, we maintain our forecast of real GDP growth of +2.5% this year (in calendar-adjusted terms).