The German economy, Europe's biggest, got off to a good start in the new year, with business confidence rising for the third month in a row, the Ifo economic institute said on Wednesday.

Ifo's closely watched business sentiment index beat analysts' expectations to rise to 108.3 points in January from 107.3 points in December.

The index "improved for the third time in succession. Although companies assess the current business situation as less favourable than in December, their business expectations have brightened considerably," said Ifo president Hans-Werner Sinn.

"The German economy has started the year positively," Sinn said.

Ifo calculates its headline index on the basis of companies' assessments of their current business and the outlook for the next six months.

While the sub-index measuring current business declined to 116.3 points in January from 116.7 points in December, the outlook sub-index rose to 100.9 points, its highest level since July 2011.