Investor confidence in Germany rose for the ninth month in September, the longest period of back-to-back gains since 1993, adding to signs Europe's largest economy is recovering from a recession in the first half.

　　An index measuring investors' expectations of future economic growth rose to a 14-month high of 60.9 from 52.5 in August, the ZEW Center for European Economic Research said. Mannheim, Germany-based ZEW surveyed 307 analysts and institutional investors.

　　The increase in the index is one of several "signs pointing to a clear economic improvement in the second half and in 2004," European Central Bank council member and Bundesbank President Ernst Welteke said. Investor optimism has been buoyed by rising corporate earnings in the second quarter and by signs of faster economic growth in the US. Germany's benchmark DAX index has increased 60 percent from a seven-year low in March, adding 175 billion euros (US196 billion) to the market value of the 30 members.

　　Bayerische motoren Werke AG Chief Financial Officer Stefan Krause said on Thursday he's "positive" about earnings growth at the luxury carmaker next year. Commerzbank AG, Germany's No 3 lender, expects risk provisions to fall as the credit quality of loans improves. Commerzbank shares have increased 83 percent this year and BMW stock has advanced 23 percent.

　　German stocks extended gains after the ZEW report.

　　Zew says its findings forecast business activity six months in advance. The indexes represent the difference between positive and negative responses in a survey of institutional investors and analysts.

　　The long-term average of its index for Germany is 33.

　　The last time the index rose for such a continuous period was between December 1992 and October 1993. An index measuring growth expectations for the dozen nations sharing the euro rose to 69.6 from 58.1, ZEW also said.

　　"German industrial production and domestic factory orders rose in July. In addition, external demand rose strongly that month," ZEW said.

　　Europe's economic recovery is lagging behind the US and Japan. The International Monetary Fund yesterday halved its growth forecast for the dozen euro nations to 0.5 percent this year and said the European Central Bank should stand ready to pare rates further until the recovery takes hold.

　　The ecb lowered interest rates for the dozen-nation euro economy by half a percentage point to 2 percent in June and in this month's report said rates are "appropriate." The US Federal Reserve cut its benchmark interest rate to 1 percent in June, a 45-year low. In Japan, borrowing costs are near zero.

　　The economy of the US, which buys a fifth of Europe's exports, will grow 2.6 percent this year after expanding 2.3 percent last year, a private survey of economists showed last week.

　　Japan's economy expanded 1 percent in the second quarter from the first, the fastest pace in 2 1/2 years.

　　Faster growth overseas and a weakening of the euro from a record US1.1933 on May 27 are helping revive exporter confidence after a slump in the first half.

　　The euro has dropped more than 5 percent since then. Germany's trade surplus widened to a record 14.1 billion euros in July.