Index of business optimism rises more than expected in sign that country will avoid recession

FRANKFURT, Germany – A key survey of German business optimism rose sharply in February amid increasing signs the country will avoid a recession.

The Ifo index released Friday rose to 107.4 from 104.3 in January. It was the fourth straight monthly increase and more than the 104.9 points expected by financial market analysts.

Germany's economy shrank 0.6 percent in the fourth quarter of 2012 and another drop in the first three months of this year would meet the common definition of a recession of two quarters of shrinking economic output. But many economists expect a rebound now that fears over the euro countries' debt crisis have eased.

A German rebound could help the economy of the 17 European Union countries that use the euro work its way out of recession later this year.