GERMAN BUSINESS CONFIDENCE RISES AS ECONOMY REBOUNDS

German business confidence surged to a two-year high in May as Europe's biggest economy rebounds sharply from the coronavirus crisis, Andrew McCathie reported for Deutsche Presse-Agentur (dpa).

The Munich-based Ifo institute said its closely-watched business climate index climbed to 99.2 points this month from an April level of 96.6, consequently adding to a slew of upbeat economic data and sentiment reports. Analysts had forecast a more modest gain to 98.0 in the May index, which was based on a survey of about 9,000 executives.

"The German economy is picking up speed," said Ifo president Clemens Fuest, with "optimism returning to hospitality and tourism," he said. The rise in the Ifo index came despite the survey pointing to concerns about supply chains emerging across the manufacturing and construction sectors.

Data released by the Federal Statistical Office (Destatis) on Tuesday showed the nation's economy being hit harder than originally estimated in the first quarter by the launch of tough new anti-pandemic measures.

German gross domestic product (GDP) shrank by 1.8 percent in the first three months of the year, dragged down by a 5.4-per-cent fall in private consumption, Destatis said.

Destatis also pointed out that in its first estimate released in April the economy contracted by 1.7 percent compared with the final quarter of 2020.

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