The improvement in German business sentiment shows that the country's economy is on a solid growth path, German Economics and Labor Minister Wolfgang Clement said Tuesday. Earlier Tuesday, the Ifo institute said German business sentiment increased for the second straight month in July, with the Ifo index rising to 95.0 from 93.3 in June, as business expectations improved strongly. This marked the index's highest level since February this year, when the index stood at 95.4. "This renewed and unequivocal rise in the Ifo index confirms the good growth outlook for Germany," Clement said in a statement. "We are now on a solid growth path and it will go further upward." Ifo President Hans-Werner Sinn said earlier Tuesday that business expectations in the retail sector worsened in July, which was probably due to the discussed increase in value-added tax. The conservative parties have pledged to increase Germany's VAT rate to 18% and use most of the proceeds to lower contributions to Germany's state unemployment insurance scheme. Chancellor Gerhard Schroeder's center-left government is against such a move in the current economic situation, pointing to continuing weak domestic demand