German business sentiment rose to the strongest level in seven months in February, offering further evidence that Europe's largest economy is picking up steam and shrugging off a recession that is hammering other euro zone peers.

The Munich-based Ifo think tank said on Thursday its business climate index, based on a monthly survey of some 7,000 companies, rose to 109.6 in February, beating expectations for 108.8. That was its highest level since July 2011 and marked the fourth increase in a row.

At the moment it doesn't look like a recession. The German economy looks robust, the domestic situation is particularly stable, Ifo economist Klaus Abberger told Reuters.

But Abberger also said risks remained, especially from the euro zone's sovereign debt crisis that has swept through Europe for two years and threatened to take down Greece.

Germany has shown resilience to the slowdown seen elsewhere in Europe, but its outlook was clouded a touch earlier this week, when the Purchasing Managers' Index (PMI) showed growth in Germany's manufacturing and services sectors slowed in February.

Yet Ifo's subindex on expectations showed investors remained confident. The reading rose to 102.3 from 100.9 in January.

Little by little the economy is picking up steam, even though there is headwind from southern Europe and also from oil prices, said Rainer Sartoris at HSBC Trinkhaus.

(Reporting by Berlin Bureau)