German businesses are increasingly confident about their future prospects, raising hopes that the gradual lifting of the lockdown will restore the fortunes of the eurozone's biggest economy.
Sentiment increased this month in the services, manufacturing and export industries, as well as among exporters, according to the influential Ifo survey.
The index climbed from 74.2 in April to 79.5 in May, though it remains well below the mid-90s level from late late 2019 and early 2020. The sentiment index is based on a 2015 reading of 100.
Katharina Koenz at Oxford Economics said the rising index “provides a glimmer of hope”.
It “provides some optimism as it suggests that a gradual recovery in business confidence is underway,” she said.
“This hints that the worst could be behind us, although the road to full recovery may be long.”
If the recovery is only gradual it means hopes of a neat and rapid “v-shaped” rebound may be fading.
“It is currently still impossible to measure the more permanent damage the crisis has caused and what its impact will be on future growth. Reviving economic activity and returning optimism are highly welcome but are definitely no reason for complacency,” said economist Carsten Brzeski at ING.
“The low point of the slump should now be behind us and there even is the chance for a short-lived strong rebound in the coming months. However, given the absolute low level of the Ifo index and the fact that the damage of the last two months is likely to weigh on growth going ahead, don’t be mistaken: this is not a ‘v’.”
It came as the country eased elements of its coronavirus lockdown, including reducing restrictions on shops and schools.
More countries are now taking similar steps to reopen their economies.
Citi’s social distancing tracker observed more lenience this week in economies including India, Spain and the eurozone, South Korea, New Zealand and Malaysia.
Japan’s Government has announced plans to reopen some regional travel.
Even if domestic economies are recovering, however, the global effects of the pandemic are still being felt sharply.
Hong Kong’s exports fell almost 4pc in April compared to the same month of 2019.
Canada’s consumer confidence also edged up.
However there are still stark reminders of the cost of the crisis.
French budget minister Gerald Darmanin said the Government;s debt will rise above 115pc of GDP, the forecast set out last month, as falling tax receipts and mounting spending add to borrowing.
The country is planning its third budget rewrite of the year next month.