Germany's Ifo index of business sentiment rose slightly in June, suggesting the euro zone's largest economy remains on track for a return to stronger growth after a weak stretch.
The closely-watched index came in at 105.9 points today, up from 105.7 the month before and in line with analysts' expectations.
Economists are monitoring Germany's economy because it has been a key source of growth in the troubled 17-country euro currency union.
Member countries such as Greece, Portugal, Spain and Italy are struggling with heavy debt and recessions.
The euro zone economy needs all the growth it can get - it shrank in the first quarter, the sixth consecutive quarterly decline. The European Central Bank says it expects a gradual recovery to set in during the second half of this year, but key indicators such as lending by banks to businesses remain weak.
Germany's export-driven economy shrank by 0.7% in the last three months of 2012 and then expanded only 0.1% in the first quarter.
It was held back by worries about the bailout of euro zone member Cyprus and by political uncertainty in Italy, where a confused election result delayed the formation of a government. Second quarter figures are not out until mid-August.
Analysts said today that the main risks to the German economy are from stagnation in its euro zone trading partners and any sudden slowdown in key export market China.
