The IFO Business Climate Index for Germany rose in May to 84.9, up from 84.5 in April, exceeding market expectations of 84.2. The index, which surveys nearly 9,000 German companies, reflects increased optimism among businesses regarding the current situation and improved expectations for the coming months.

Specifically, the current situation index rose to 86.1 from 85.4 in April, while the expectations index climbed to 83.8 from 83.5 in April.

At the sector level, the manufacturing index fell to -15.0 from -15.4 in April, the services index dropped to -6.9 from -11.0, and the construction index declined to -24.3 from -23.8.