German business confidence rises sharply in July, as the outlook for manufacturing and exports brightens strongly according to a key economic indicator released on Friday.
The Ifo institute based in Munich said its business climate index has risen sharply in July, reaching 106.2 points, while in June the data was only 101.8 points.
"This increase is the largest since German reunification. The firms have reported a considerably better business situation than in the previous month," said Ifo. "The German economy is in a party mood."
The data was also much optimistic than the previous expectations. Economists once expected the data would decline to 101.5, reported by Bloomberg News survey.
"In manufacturing the business climate has brightened strongly." Ifo said. "With regard to exports the firms see similarly favourable opportunities as in June."
Ifo also said, in wholesaling, retailing and construction the business climate has brightened both currently and for the coming six month.
The whole German economy is in a optimistic mood at the moment, as its unemployment rate has kept falling for 12 months, which was taken as a "minor miracle."
"Germany will reach its recovery peak in the second quarter, then its recovery will gradually slows down in the next half year," said Rolf J. Langhammer, vice president of Kiel Institute for the World Economy./.