Germany's business confidence rose to the highest level since 1990 in December, despite the government's plan to raise the value-added tax in January 2007, a leading economic institute said on Tuesday.

The Munich-based Ifo institute said in a report that the business confidence index, based on responses from 7,000 executives, climbed to 108.7 points from 106.8 in November.

The Ifo Business Climate Index for German industry and trade rose in December, continuing the rise in the index that began in autumn 2005.

"The German economy is experiencing a very strong economic boom as last observed in 1990," said Hans-Werner Sinn, president of the Ifo Institute for Economic Research at the University of Munich.

In manufacturing, the business climate index rose by four points. The already favorable business situation received even better marks from the manufacturers, Ifo said.

The survey also found that for the third month in a row, more confidence was expressed in the six-month outlook for manufacturing. The firms also continue to see good opportunities for their export business, the main driving force for the country's economic growth.

In construction, retailing and wholesaling, the business climate index advanced respectively by 3.8, 1.7 and 3.8 points.

Source: Xinhua