BERLIN An abating of the euro zone debt crisis has allowed German companies to regain confidence and expectations for exports have improved in Europe's biggest economy, Ifo economist Klaus Wohlrabe told Reuters on Wednesday.
"There is a certain calming down at the end of the year. Export expectations have risen. Companies are growing confident again," Wohlrabe said, adding that business was going well in the run-up to Christmas.
"Christmas business was really good. The climate in retail has deteriorated slightly but that is mainly due to car sales. That is not dramatic," he said, adding electronics and sports goods had been selling well.
Wohlrabe said he expected the German economy to contract by 0.3 percent in the fourth quarter of this year but to return to slight growth in the first quarter.
Earlier, the Ifo think tank said German business sentiment climbed for the second month running in December.
(Reporting by Christian Kraemer, writing by Madeline Chambers)