By Klaus Lauer and Miranda Murray
BERLIN (Reuters) -German business morale fell for a third consecutive month in August, a survey showed on Monday, pushing back recovery hopes for Europe’s largest economy.
The Ifo institute said its business climate index fell to 86.6 in August from 87.0 in July, above a forecast by analysts polled by Reuters for a reading of 86.0.
“The German economy is increasingly falling into crisis,” said Ifo president Clemens Fuest.
Companies were both more pessimistic and assessed their current situation as worse, Ifo found in its survey of around 9,000 managers.
Firms continue to flag a lack of orders across all sectors, said Ifo economist Klaus Wohlrabe, who predicted that the third quarter could bring a decline in German gross domestic product.
The index measuring current conditions fell to 86.5 from 87.1 the month before, while expectations were down only slightly, at 86.8 from a slightly upwardly adjusted 87.0.
“There are not too many reasons for optimism at the moment,” said LBBW bank’s Elmar Voelker, listing a bumpy global economy, geopolitical risks and upcoming U.S. presidential elections.
“There will be no economic recovery for the time being,” said VP Bank chief economist Thomas Gitzel.
“The German economy continues to ride on a razor edge between recession and minimal growth,” he added.
The Ifo survey is in line with the latest purchasing managers’ index (PMI) data, which saw business activity contract in August for a second month in a row and by more than expected.
(Reporting by Klaus Lauer, Rene Wagner, Miranda Murray and Rachel More, Editing by Friederike Heine and Toby Chopra)
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