Morale among German investors rose to its highest level in four months in December, a survey showed.

This suggests that Europe's largest economy is managing to weather crises including the Volkswagen scandal, a record refugee influx and the Paris attacks. 

Mannheim-based ZEW said its monthly survey, published today, showed economic sentiment rose for a second consecutive month to 16.1 points from 10.4 in November. 

That beat the Reuters consensus forecast for a reading of 15. 

The survey comes after market players felt let down by the European Central Bank's decision on December 3 to cut its deposit rate deeper into negative territory and extend its asset-buying programme by six months. 

Markets had expected much more from the central bank which is fighting stubbornly low inflation.

The Bundesbank has forecast that Europe's economic powerhouse will grow by 1.7% this year and by 1.8% in 2016 on the back of booming domestic demand as consumers revel in rising wages and record high employment.

Analysts said the survey supported other evidence that "neither the Volkswagen scandal nor the Paris attacks have taken a significant toll on the German economy". 

The record influx of refugees arriving in Germany this year poses a major challenge for German society and politics while an economic slowdown in emerging markets is putting German exports under pressure, ZEW President Clemens Fuest said. 

But he added that the ZEW survey showed that investors were optimistic overall that the German economy would pull off a robust performance next year despite these challenges.  

Other recent data has been mixed, with business morale improving, the private sector growing and industry orders up. But exports have fallen and industrial output has only risen slightly. 

A separate gauge of current conditions increased to 55.0 points from 54.4 points in November. This index had been expected to fall to 54.2. 

The index was based on a survey of 223 analysts and investors conducted between November 30 and December 14.