German execs and consumers full of confidence

German business confidence picked up in May as companies became increasingly optimistic about the outlook for Europe's largest economy, the Munich-based Ifo economic institute said Wednesday.

The think tank's closely watched monthly index increased to 107.7 points from106.7 points in April.

"The German economy is showing solid growth," Ifo President Clemens Fuest said in a statement. The German government expects gross domestic product to expand by 1.7 percent this year.

Optimistic consumers

In a separate survey, market research group GfK on Wednesday reported its forward-looking German consumer confidence index for June climbed to 9.8 points, up slightly from the 9.7 points recorded in May.

"Consumers are working from the assumption that the German economy will continue its moderate upturn in the months to come," GfK expert Rolf Bürkl said in a statement, adding that the index had risen for the third consecutive month.

He said private consumption would remain an important pillar of the domestic economy, but warned of a number of imponderables such as the outcome of the June 23 referendum on EU membership in the UK.

"Should it come to a Brexit, it could unnerve German consumers and weigh on sentiment," GfK argued.

hg/jd (dpa, AFP, AP, Reuters)