Confidence increases in Germany amid hope for recovery
Wednesday November 25 2009
German business confidence increased more than economists forecast to a 15-month high in November, suggesting the economic recovery may gather pace next year.
The Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, rose to 93.9 from 92 in October, the highest reading since August last year.
Economists expected a gain to 92.5, according to the median of 37 forecasts in a Bloomberg survey. The index reached a 26-year low of 82.2 in March.
Economic growth accelerated in the third quarter as companies replenished inventories and rising export orders prompted factories to ramp up production. The manufacturing industry expanded for a second month in November and the country's benchmark DAX share index has advanced 20pc this year.
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Ifo's "sharper than expected rise" is "another encouraging sign that the economy continued to expand in the fourth quarter," said Jennifer McKeown, an economist at Capital Economics Ltd in London. "We expect Germany to lead the eurozone recovery."
Ifo's gauge of the current situation increased to 89.1 from 87.4 while an index of executives' expectations advanced to 98.9 from 96.8.
The Economy Ministry last month raised its economic outlook, forecasting growth of 1.2pc in 2010 after a 5pc contraction this year.
Chancellor Angela Merkel's government is spending about €85bn on measures to stimulate growth.
Irish Independent
