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Business

German business climate warming in December

The mood among German business leaders has risen for the second consecutive month in December, the Ifo research group has found. As tensions in the eurozone ease, German CEOs expect a pick up in their business.

Ifo's closely watched business climate index rose to 102.4 points in December from 101.4 points last month, the Munich-based research group announced Wednesday.

The second monthly gain in a row was stronger than predicted by economists, who had forecast a rise to only 102 points in a poll carried out by Reuters news agency.

"German businesses appear to be in a Christmas mood," said Ifo President Hans-Werner Sinn, as he presented the survey of opinions of 7,000 German executives.

Sinn noted that expectations rose significantly in German industry and among export businesses. By contrast, the business climate among wholesalers and retail businesses was still subdued, he added.

Ifo's confidence barometer is, indeed, a mixed bag in December, as it contains not only brighter outlooks for the coming six-month period, but also more dire assessments of current business development.

As the German economy is expected to shrink in the final quarter of 2012, Ifo's sub-index fathoming current business, subsequently fell by one point to a reading of 107.1 points.

According to the German central bank, economic contraction is to last throughout the winter, and won't result in an overall 2013 growth rate higher than 0.4 percent.

uhe/mz (dpa, Reuters)