[BERLIN] German business confidence rose again in December, the Ifo economic institute said Thursday, as the prospects for Europe's biggest economy grew sunnier.
The Ifo institute's closely watched business climate index rose to 105.5 points this month from 104.7 points in November, the think tank said.
"The outlook for the months ahead continued to brighten," Ifo chief Hans-Werner Sinn said in a statement.
"Dropping oil prices and a falling euro exchange rate are seasonal gifts to the German economy." Ifo calculates its headline index on the basis of companies' assessments of current business and the outlook for the next six months.
The sub-index measuring current business held steady at 110.0 points compared to last month, while the outlook sub-index climbed 1.3 points to 101.1 points.
Analysts were encouraged by the improved index following a positive turnaround in November from long months of decline.
"German business confidence confirmed the decent rebound of the economy in the final quarter of the year," Carsten Brzeski of ING-Diba bank in Frankfurt said.
He said that the worst crises threatening the economy - the Ukraine conflict and eurozone weakness - had eased of late.
But he said "complacency" undermining a drive for new economic reforms, Russia's economic woes and Germany's over-reliance on exports all posed risks.