German business confidence rose to its highest level in seven months in January, data showed on Friday, amid growing optimism that Europe's top economy has put the worst of the region's debt crisis behind it.
The Ifo institute's closely watched business climate index for Europe's top economy rose to 104.2 points in January -- its highest reading since June -- from 102.4 points a month earlier.
Economists polled by Dow Jones Newswires had been pencilling in a more modest rise to 103.0 points.
"The German economy made a promising start to the new year," said Ifo president Hans-Werner Sinn.
"The Ifo business climate rose for the third time in succession. Assessments of the current business situation were somewhat more positive after deteriorating last month. Future business prospects improved considerably," Sinn said.
Ifo calculates its headline index on the basis of companies' assessments of their current business and the outlook for the next six months.
The sub-index measuring current business rose to 108.0 points in January, making good the slight decline seen last month. And the outlook sub-index jumped to 100.5 points, its highest reading since May.