Business confidence in Germany improved for the fourth consecutive month in July amid signs that Europe's largest economy may be heaving out of its economic slump, a key economic index has shown.
Business confidence in Germany is slowly on the rise
The closely watched Institute for Economic Research (Ifo) business climate index for July exceeded economists' expectations by rising to 87.3 points after reaching a seven-month high in June of 85.9
Analysts had predicted the index to rise to 86.4 points for July amid signs the global recession was loosening its grip on the German economy.
"Firms are not so unhappy with the current business situation as they were the previous month. Those surveyed are, again, less skeptical about the coming six months. It looks as though the economy is gaining traction," the institute said when releasing the results on Friday.
The index is based on a survey of 7,000 German executives.
Another key German sentiment survey released last week showed investor confidence took a surprise fall in July. The Mannheim-based Center for European Economic Research (ZEW) said its monthly forward-looking index had slumped 5.3 points to 39.5 amid concerns the credit crunch would stymie recovery in Germany's economy.
The German government has said it expected the country's export-driven economy to shrink by around six percent this year, second only to Japan among advanced economies.
Editor: Neil King