German business morale fell more than expected in September and for a fourth consecutive month, a survey showed on Tuesday, pushing back recovery hopes for Europe's largest economy.
The Ifo institute said its business climate index decreased to 85.4 in September from 86.6 in August.
Analysts polled by Reuters had forecast a reading of 86.0.
"The German economy is coming under increasing pressure," said Ifo president Clemens Fuest.
The survey of around 9,000 company managers found most assessed the current situation as having deteriorated.
The current conditions index fell to 84.4 in September from 86.4 in August. Economists polled by Reuters had forecast a reading of 86.0.
"The German economy is on the edge of a downward spiral," Ifo economist Klaus Wohlrabe told Reuters.
He said Germany's economy, which contracted in the second quarter, may shrink further in the third quarter. A recession is normally defined as two consecutive quarters of contraction.
The outlook for the coming months also deteriorated further, with the index falling to 86.3 in September from 86.8 in August.
The business climate index declined in all sectors with the exception of construction. In manufacturing, the index fell to its lowest level since June 2020.
