IFO claims German business sentiment improved as electoral risk fades

BERLIN, Germany - In its business climate index released on Monday, the Munich-based IFO economic institute said that based on a monthly survey of some 7,000 firms, the German business morale brightened more than expected in April.

The survey, which is a benchmark for sentiment in the region's largest economy, showed that the german business morale hit its highest in nearly six years.

The findings suggested that company executives are more upbeat about the current state of Europe's largest economy.

IFO said its business climate index rose to 112.9 from an unpwardly revised 112.4 in March.

It said that the reading was the highest since July 2011.

IFO chief Clemens Fuest said in a statement, “We have a very solid upswing in the Germany economy at the moment. Last year the strength was mostly related to domestic spending, but now its much more broad based.”

The IFO's index of current business conditions also showed improvement, rising to 121.1 from 119.5.

The institute also noted that managers' assessments of the current business situation improved significantly while their outlook for the coming six months was a less optimistic.

Since the survey was conducted in the first half of April, it does not include reactions to the first round of the French presidential election.

However, the survey's expectations component that gauges business leaders' views six months from now recorded a decline, falling modestly to 105.2 from 105.7.

The IFO readings meanwhile confirm a series of positive data signals from the Eurozone economy, set to grow by around 0.7 percent in the first quarter of this year.