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Last Updated: Wednesday, 25 January 2006, 10:47 GMT
German firms grow in confidence
VW factory in Wolfsburg, Germany
German business confidence is growing
German companies are more confident about their prospects than at any time in the past five years, an influential survey has revealed.

Satisfaction with the current business climate is at its highest since the end of 2000, according to research by the Ifo economic research institute.

Retailers and construction firms have seen growth in trade, while the outlook for exports has also improved.

The German economy is expected to continue its gradual recovery in 2006.

Lasting recovery

Key indicators have pointed to an upturn in Europe's largest economy after several years of weak growth.

The upswing has gained in both breadth and momentum
Hans-Werner Sinn, Ifo institute

Ifo's monthly economic report - which surveys 7,000 businesses about their current and future prospects - showed overall confidence had risen since December.

It also showed that firms were more hopeful about their prospects over the next six months than at any time since 1994.

"Doubts regarding the durability of the upswing, which has been observable since last summer, should be further dispelled by these results," said Hans-Werner Sinn, Ifo's chief executive.

"The upswing has gained in both breadth and momentum."

The German economy grew just 0.9% last year, down from 1.6% in 2004.

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