The German Ifo economic institute reported today that its index of business confidence had risen sharply in December to the highest point since April. Ifo said that the index had risen by 2.1 points to 96.2 points.
Analysts had forecast that it would fall by 0.2 points to 93.9 points.
The rise caught most analysts by surprise because in November the business confidence index had fallen to 94.1 points, its lowest level in 14 months.
The upswing in optimism went across all sectors, and was especially strong in the wholesale and retail trade, Ifo said.
Ifo's chief economist Gernot Nerb said the rise indicated that the German economy might be heading for better times. 'For the first time for a long time, we can see signs of domestic demand strengthening,' Nerb told the AFP news agency.
