In February the German business confidence increased more than analysts’ forecast to a 10-month high.
The Ifo institute, located in Munich, said its business climate index increased to 107.4 from 104.3 last month, the biggest rise since July 2010 and the fourth straight month of gain. Analysts predicted that business confidence will increase to 104.9. The Bundesbank announced that it expects economy to rebound after it fell 0.6% during the last quarter.
“Nothing seems to be able to stop German business optimism,” said Carsten Brzeski, senior economist at ING Group in Brussels. “While most other euro-zone countries remain stuck in recessionary territory, preoccupied with structural reforms and austerity, German businesses are surfing on the wave of optimism.”
As Italy and Spain still struggle with recessions, the European Central Bank expects European economy to drop 0.3% this year, while Bundesbank predicts a 0.4% growth in Germany. Last month, auto sales in Europe dropped to the lowest level seen in the past 23 years, according to the European Automobile Manufacturers’ Association. Still, there are signs that the economy in Germany is recovering, as factory orders increased 0.8% in December, exports as well and industrial production climbed for the first time in 5 months.