German corporate sentiment rose to its highest in 17 months in December, showing companies expect business to improve next year alongside a moderate recovery in Europe's largest economy.
The Munich-based Ifo think tank said its business climate index, based on a monthly survey of some 7,000 firms, rose to 94.7 from 93.9 in November.
The December headline reading was the highest since July 2008. A current conditions index rose to 90.5 from 89.1 in November and a business expectations index edged up to 99.1 from 99.0 a month earlier.
"After the dramatic economic collapse last winter, these survey results should bring some Christmas cheer," Ifo said in a statement.
Germany pulled out of its deepest post-war recession in the second quarter, when the economy grew by 0.4 per cent, and the expansion gained pace over the following three months, posting a 0.7 per cent increase on the quarter.
But the recovery remains fragile and the Economy Ministry said yesterday the recovery likely slowed in the fourth quarter.
The government has forecast the economy to grow by 1.2 per cent next year, though finance minister Wolfgang Schaeuble has said that projection is "very cautious".
Schaeuble presented a draft 2010 budget on Wednesday that foresees a 7.3-per cent rise in federal government spending to €325.4 billion. He said the budget aimed to "counteract this dramatic economic slump and to avoid worse".
Reuters
