German business confidence climbed for the third consecutive month in January, the Ifo economic research institute reported on Friday.

The think tank's index gauging entrepreneurs' expectations of business opportunities in the months ahead rose to 104.2 points, up from 102.4 points in the previous months.

"The German economy has started into the new year with a lot of hope," Ifo President Hans-Werner Sinn said in a statement in Munich.

Watch video 01:15 German business confidence has risen

End of a crisis?

He mentioned that order books of German firms were filling up again as demand at home and abroad was picking up, albeit slowly. "Optimism is returning to the German economy," Sinn said.

The think tank said the results of its latest survey added to hopes that the German economy might expand again at the beginning of the current year, after contracting by 0.5 percent in the final quarter of 2012.

KFW Chief Economist Jörg Zeuner said German companies had left behind much of the uncertainty that surrounded them last year. "The global economy has embarked on a course of recovery, and domestic consumption is on the rise owing to low unemployment and rising wages in many industries," Zeuner argued.

hg/hc (Reuters, AFP, dpa)