Sunny outlook for German economy unclouded by VAT hike

0 Comments | AFP, May, 2007

FRANKFURT (AFP) — The German economic outlook has rarely looked sunnier, with sky-high business confidence and growth strong enough to shrug off a sharp rise in sales tax early this year, data showed on Thursday.

The Paris-based Organisation for Economic Cooperation and Development (OECD) similarly gave Europe's biggest economy a clean bill of health and upgraded sharply its forecasts for German growth both this year and next year.

Top economic think-tank Ifo said that its widely-watched monthly business climate index remained close to record levels this month, with the barometer unchanged at 108.6 points in May.

That was in line with expectations: analysts' had predicted that the Ifo index would remain just 0.1 point off the all-time high of 108.7 points...