As analysts cheered the results and hailed an exceptional rebound in Europe's top economy, German business confidence hit a third straight record high this month, the Ifo institute said on Feb. 21. The headline index nudged up to 111.2 points in February after posting 110.3 points in January, leading Alexander Koch, an analyst at UniCredit to say that "the sky is the limit" for Germany, the world's second exporter after China.
Commerzbank chief economist Joerg Kraemer said the outcome was also the highest reading for the former West Germany since 1969.
Meanwhile, for the 17-nation eurozone, manufacturing and service activity in February hit levels last seen in July 2006, another closely-watched survey showed. The purchasing manager's index (PMI) compiled by the research group Markit jumped from 57 points to 58.4 points in February, owing to a sharp pick-up in both the manufacturing and service sector indices. In a sign that the eurozone may be over the worst of its crisis, the PMI revealed improved readings for France, Ireland and Spain despite austerity measures in the latter two countries.
Following the deepest recession in more than six decades in 2009, the German economy has bounced back strongly as global demand for its goods has revived. For this year, Berlin expects growth of 2.3%, dipping slightly to 1.8% in 2012.
Cheering the results, Economy Minister Rainer Bruederle said: "The German economy has left the crisis behind and is now in top shape."
IHS Global Insight economist Timo Klein forecast that, barring a collapse in global momentum, the German economy could even expand by 2.7% this year. Recent data "testify to the continuing buoyancy of the German economy, which shows no sign of being hurt to any significant extent by the dampening influences related to the Eurozone debt crisis," he said.
Moreover, the recovery in Germany appeared to be becoming more broadly based, with manufacturing firms planning to hire more workers and the construction sector also looking with greater optimism towards the future.
Copyright Agence France-Presse, 2011
