Germany's IFO business climate index bounces back in March

Business confidence in Germany bounced back in Germany in March after a dip the previous month that had worried economists.

The IFO Institute's business climate index climbed to 106.7 from 105.7 a month ago, higher than the consensus forecast of 105.9.

A reading of current assessment index of 113.8 was also higher than expectations of 112.6 and up from 112.9 in February.

The expectations index rebounded to 100 from 98.9 a month ago, beating estimates for 99.5.

Sentiment rose strongly in retail and improved modestly in manufacturing and wholesale.

On the downside, there was a slight dip in construction, while the aggregate services indicator fell modestly due to a fall in both expectations and the current assessment.

"We hope for further gains in the coming months, but for now this adds to the evidence that the economy is not on the verge of recession," said Pantheon Macroeconomics.

Pantheon said the overall headline IFO business climate index remained consistent with decent GDP growth, but the expectations index is "still too weak for comfort".