German business morale rose in March, a survey showed on Tuesday, as companies expect a recovery after two years of contraction in Europe's largest economy.
The Ifo institute said its business climate index stood at 86.7 in March, in line with the forecasts of analysts polled by Reuters.
Companies were more satisfied with the current situation and their expectations also rose noticeably, the survey showed.
"The German businesses are hoping for a recovery," said Ifo's president Clemens Fuest.
In the first quarter, the economy is expected to grow by 0.2%, said Klaus Wohlrabe, head of surveys at Ifo.
Germany's gross domestic product fell by 0.2% in the fourth quarter.
