German business confidence rises for third month running

AP News
Posted: Jan 26, 2015 6:32 AM

FRANKFURT, Germany (AP) — German business optimism rose for the third straight month in January, giving a positive signal from Europe's biggest economy as executives foresee export gains from the weaker euro.

The business climate survey from the Munich-based Ifo institute rose to 106.7 points from 105.5 points in December, beating expectations among market analysts for 106.2.

Ifo President Hans-Werner Sinn said that "stronger impulses are expected from exports thanks to the falling euro exchange rate."

Germany's export-oriented economy should benefit from the steep drop in the euro from just under $1.40 in May to $1.13 on Monday. The drop is expected to continue as the European Central Bank launches a bond-buying program that will pump freshly-printed euros into the eurozone economy in an attempt to raise inflation and re-start growth.

Stronger German growth would support efforts to pull the eurozone out of economic stagnation and reduce unemployment from a high 11.5 percent. The German economy grew only by an estimated 1.5 percent last year.

The Ifo business climate index is based on around 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing. Firms are asked about how things are now and about their expectations for six months from now.