The index has been on a clear uptrend since its trough in October 2014. The combination of a lower oil price, and European Central Bank easing policies that led to euro (EUR) depreciation and lower borrowing rates is helping German businesses.
Exporters are likely to be particularly positively affected by EUR depreciation. In the last survey, manufacturers, wholesalers and retailers all showed an improved outlook.
The construction-sector outlook deteriorated, but remains strong. Germany is expected to maintain this positive momentum in Q2, unless geopolitical events raise uncertainty or the situation in Greece becomes more dramatic.
"We expect the German IFO business climate index to have increased to 108.7 in April from 107.9 in March, an eight-month high", said Standard Chartered in a report on Thursday.
