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German business confidence rises

February 23, 2015

Managers' confidence in the German economy has risen as exporters take advantage of favorable conditions. It was yet another positive sign for the strength of Europe's largest economy.

Factory workers at Porsche
Image: picture-alliance/dpa/J. Woitas

A weak euro and low interest rates buoyed business confidence in Germany for the fourth straight month in February, a closely watched indicator showed Monday.

The Munich-based Ifo institute said a survey of 7,000 businesses across several sectors had recorded an uptick in its business climate index to a seven-month high of 106.8 points from 106.7 a month earlier.

The rise in the Ifo indicator was another positive sign that Europe's largest economy was leading a recovery in the eurozone, profiting from booming exports thanks to a weak euro and loose monetary policy by the European Central Bank.

"The German economy is proving robust in the face of geopolitical uncertainty," said Ifo President Hans-Werner Sinn.

Good times ahead

Germany's economic growth comes despite challenges posed by falling oil prices, the conflict in Ukraine, icy relations between the West and Russia and uncertainty over Greece's international bailout.

Analysts were optimistic that German business output would continue to grow as exporters exploited a competitive edge provided by a weak euro. Managers' outlooks for the coming six months had also increased to 102.5 points from 102.0 in January.

"Combined with the already solid labor market, almost everything is put in place for another strong year of the German economy," said ING analyst Carsten Brzeski. "The economy should enjoy a pleasant tail wind, stemming from lower energy prices, the weaker euro and rock-bottom interest rates."

cjc/ng (AP, dpa)