The German economy has left its European counterparts behind in its leap out of recession, a closely watched business climate survey said Friday. The Ifo index showed the largest gain in business confidence in 20 years.
The index shows exports up and unemployment down
German business confidence surged unexpectedly in July to record its highest monthly gain since the country's reunification 20 years ago, a key business climate survey published Friday showed.
The Ifo institute index, based on a survey of 7,000 executives, jumped from 101.8 points to 106.2 points, the largest gain since 1990. Experts had been expecting a fall in business confidence.
At the heart of the recovery was a strong rise in German exports over recent months, accompanied by falling unemployment since the summer of 2009.
"The rise is the biggest since German reunification. Firms are reporting significantly more favorable business conditions than last month," the Munich-based Ifo said. "The German economy is back in party mood."
Germany's central bank, the Bundesbank, forecast earlier this month that "real gross domestic product therefore should increase at an extraordinarily strong pace in the second quarter.
"Dynamic global growth remained the main driver for the German economy," it said.
The Ifo index is one of Europe's key economic indicators and is used to gauge business sentiment among industry leaders in Germany, Europe's largest economy.
Author: Darren Mara (dpa/AFP)
Editor: Rob Turner