Data from the Ifo institute released on Wednesday showed that German business confidence, measured by the Ifo business climate indicator, rose to 107.7 on the month, up from 106.6 in April. Economists were expecting a rise to 106.8. The Ifo's currency conditions index was at 114.2, up from 113.2 in the previous month. The data suggested that business sentiment was improving with construction also posting a record high. Analysts expect that based on the current Ifo assessments, the German economy could be on track to extend its quarterly gains in GDP which is expected to rise to 1.50% on an annual basis, more than the 1.30% annualized growth recorded in the first quarter. However, government officials remain doubtful if Germany would be able to sustain the pace of growth seen in the first quarter which rose strongly due to domestic demand and moderate exports.