Business confidence rises unexpectedly in Germany
German business confidence rose unexpectedly in November after six straight declines, a closely-watched survey showed Friday, raising hopes that Europe's largest economy can continue to weather the financial crisis.
Munich's Ifo institute said its key business climate figure rose to 101.4 points in November from 100 in October. Economists had been predicting a modest drop to 99.5. The increase in the headline index came on the back of increases in the measures about the present and the future.
"The latest positive news from business surveys clearly increased the odds for a real turnaround at the change of the year," said UniCredit economist Alexander Koch.
However, he cautioned that "the fog of uncertainty remains unusually dense and downside risks are high."
Germany's economy, Europe's biggest, has recovered strongly from its deep recession in 2008-09 despite the huge debt problems on its doorstep. However, there have been recent signs that its export-driven economy is beginning to slow amid weakening demand from other countries from within the European Union, though exports outside the bloc have remained strong.
Earlier this month, the German government's panel of independent economic advisers forecast that the economy will avoid falling back into recession and will instead grow by 0.8 percent this year and next.
"Even if domestic demand should lose some steam due to a weaker labor market, the risk for the economy of falling off the cliff looks very limited," ING economist Carsten Brzeski said. "The German economy might have lost its invulnerability but today's numbers indicate that the economy should not join the race to the bottom most other eurozone countries are currently in. "