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Frankfurt • Germany's Ifo Institute says its index of business confidence, a closely watched gauge of economic activity in Europe's largest economy, has risen after three months of declines.
Munich-based Ifo said Tuesday that its main index rose to 106.7 points from 105.7 points the month before.
The increase was also more than anticipated. Market expectations were for a more modest rise to 106.0 points.
Industrial firms saw stronger demand for consumer goods, the institute said in a statement.
The improvement comes as fears about global trade and financial market turmoil seem to be easing after a shaky start to the year. Economist Carsten Brzeski at ING-DiBa said that "German businesses seem to have shaken off fears of long-lasting global slowdown."
The Germany economy grew by a quarterly rate of 0.3 percent in the fourth quarter of last year, and enjoys a low unemployment rate of 4.3 percent that has helped buoy consumption.
Ifo surveys 7,000 businesses about their assessment of current conditions and their view of the future, both of which rose in the current survey.
The index is considered a leading indicator, meaning it suggests where the economy may be going in coming months.