MANNHEIM, Germany Another glimmer of hope for the battered german economy emerged Tuesday when a leading confidence index showed a further sharp rise in January.

A monthly confidence barometer calculated by the zew institute in Mannheim rose sharply in January, suggesting the shock to economic confidence in Germany and the euro zone from the September 11 terror attacks on the U.S. was proving to be fairly short-lived, AFP said.

Indeed, coming hot on the heels of other positive leading indicators, the Zew index suggests the biggest euro-zone economy looks to be heading for recovery quite soon.

The Zew index, based on a poll of 318 analysts and institutional investors, rose by 10.1 points to a plus 35.9 points in January.

It had already risen by 12.7 points to show a plus of 25.8 points in December.

The latest January reading "confirms the positive outlook for economic developments in Germany in 2002, which the index has been indicating for some months now," Zew said.

"Recently, other early indicators have also been pointing to economic recovery."

The Zew indicator represents the balance between positive and negative expectations for the German economy over the next six months.

If the majority of analysts and institutional investors polled believe the economy will improve, the index shows a plus. If most are expecting a deterioriation, the index shows a minus.

Zew also polls analysts and institutional investors about their assessments of the current situation.

The so-called "current situation index" showed a minus of 83.9 points in January. Nevertheless, that represented an improvement of 3.9 points from December, when the reading had been minus 87.8 points.

In fact, it was the first time since September 2000 that the current situation index had shown an improvement, a spokesman for Zew said.

The Zew is the second most important confidence index in Germany after the monthly business climate index calculated by fellow institute IFO.