Europe's
largest economy has shown further signs of fragility, as a key indicator of
German business confidence fell for a fifth successive month.
The
Ifo think tank's Business Climate Index dropped to 104.7, slightly below
analysts' expectations, and the lowest reading since April last year.
"The
German economy is no longer running smoothly," Ifo said, but added that it
still expected gross domestic product (GDP) to grow in 2014.
GDP
shrank by 0.2% in the last quarter.
On
Monday, Germany's central bank insisted that the country's economy remained
robust, adding that "the general economic trend should stay positive
despite the slowdown in the speed of expansion in the first half of 2014".
However,
monthly Purchasing Managers Index (PMI) figures, released on Tuesday, indicated
that
Germany's manufacturing industry expanded in September at the slowest rate
in 15 months.
Ifo's
president, Hans-Werner Sinn, also said that his organisation's report found
that "expectations for the next six months hit their lowest level since
December 2012".
The
Ifo's Business Climate Index is based on approximately 7,000 monthly survey
responses from firms in manufacturing, construction, wholesaling and retailing.
Germany's
economic woes will be of great concern to the eurozone, which is battling persistently
low growth and low inflation.
Earlier
this month, the European Central Bank introduced new measures to stimulate the
area's flagging economy.
As
well as launching an asset purchase programme, through which it will buy debt
products from banks, the ECB cut its benchmark interest rate to 0.05%.
BBC
Business
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