BERLIN (Reuters – German businesses were surprised to see a slight increase in morale in April, as more companies felt less pessimistic following initial shocks from the conflict in Ukraine. A survey was conducted Monday.

According to the Ifo Institute, its Business Climate Index rose slightly from March’s 90.8 to 91.8 levels in April. According to a Reuters poll, April’s reading was 89.1.

Economists stated that the Ifo survey’s modest rise did not indicate a shift towards optimism over the next months.

The war in Ukraine has made the general environment no better than it was a month before. Alexander Krueger (chief economist, bank Hauck Aufhaeuser Lampe) said that companies are in bad spirits, particularly when they look ahead.

Joerg Krämer, Chief Economist at Commerzbank (ETR): said that the War in Ukraine and possible Russian embargos on Energy Imports were still major concerns.

A government source revealed to Reuters that Germany’s growth projections for Europe’s largest economy will be cut to 2.2% in 2022 from 3.6%, due to the effect of war.

This Wednesday will see the latest economic forecasts from government.

The Bundesbank of Germany warned that Germany’s economy could contract by almost 2% this year, should the conflict in Ukraine continue. This would result in an increase in Russian energy boycott, lower external demand, and increased uncertainty.