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German business morale posts record rise

German business morale posted its strongest rise in June since records began.

That's according to German research group the Ifo institute.

It also said Wednesday (June 24) that the country should return to growth in the third quarter.

Ifo said its June survey of companies showed the business climate index surging to 86.2, from 79.7 in May.

It marks the largest jump since records started in 1990.

Organisation President Clemens Fuest said the 'expectations' of companies 'leaped higher'.

He also said German business 'sees light at the end of the tunnel' after being hit hard by global lockdowns brought in to control the spread of the new virus.

Ifo predicts the economy will return to growth in Q3 after an expected double-digit contraction between April and June.

One Ifo economist said the low point 'is behind us' and that 'export expectations have risen significantly'.

Europe's largest economy still faces its worst recession since World War Two.

The government forecast in April that GDP would shrink 6.3% this year.

Ifo's current conditions index rose to 81.3 from 78.9, and the expectations index surged to 91.4 from an upwardly revised 80.5.

The government hopes its stimulus package of more than 130 billion euros - or $147 billion - will put the economy back on the path to growth later this year.