Surprise rise in German business morale

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Surprise rise in German business morale

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German business sentiment unexpectedly rose in June, showing the economy is still doing better than others in the euro zone.

The data, which temporarily boosted both the euro and caused German shares to rise, came from the Ifo think tank’s monthly survey of some 7,000 companies.

But firms were at their least optimistic about the future in more than a year, pointing to slower growth in coming months.

The survey showed some firms looking beyond a generally rosy near-term picture to weigh the risk of possible fallout from the Greek debt crisis and a more difficult global outlook.

“Although their business expectations are again somewhat less optimistic, the firms remain confident,” Ifo President Hans-Werner Sinn said in a statement. “The German economy is experiencing a robust upswing.”

Recent data suggested most investors now expect growth in the euro zone’s largest economy to slow over the next six months and the Bundesbank sees GDP expansion of 3.1 percent in 2011 and 1.8 percent in 2012 after 3.6 percent last year.

Ifo economist Klaus Abberger said the Greek debt crisis posed little problems for the real German economy, at least for now.

“Greece is at the moment not such a big problem for the real economy in Germany,” he said. “First we will have a very weak second quarter, but not because we are in a slowdown, because we had a very, very strong first quarter. But afterwards, I think, the upswing will continue in Germany,” he added.