German business confidence hits 10-month high | Europe| News and current affairs from around the continent | DW | 22.02.2013
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German business confidence hits 10-month high

Business morale among German industry leaders has surged at its fastest pace in more than two years. The Munich-based Ifo think tank's index shows that confidence has kept rising apace with a pick-up in exports.

German business confidence rose to its highest level in February, according to a closely watched monthly survey by the Munich-based Ifo economic research institute released on Friday.

#video#The index measuring German entrepreneurs' expectations for the next six months climbed to 104.6 points this month from 108.1 points in January, marking its highest reading since July 2011.

The benchmark index reflecting both expectations and business leaders' assessments of their current situation rose to 107.4 points, its highest level since April 2012.

Improvements on all fronts

"The German economy is regaining momentum", Ifo President Hans-Werner Sinn said: "Satisfaction with the current situation continues to grow, and survey participants also expressed greater optimism about their future perspectives."

Ifo economist Klaus Wohlrabe said he was confident exports would pick up soon and noted that the investment backlog was beginning to clear. Data released earlier had shown that a sharp drop in shipments abroad had contributed to a 0.6-percent contraction of gross domestic product in the final quarter of last year.

But commenting on the good news on Friday, ING Belgium economist Carsten Brzeski said there could be no talk about a looming recession in Germany any longer. "It's a wow effect - nothing seems to be able to stop German business optimism," he said, pointing to the protracted sovereign debt crisis particularly in southern Europe.

hg/ipj (Reuters, AFP)