BERLIN, Sept 25 Reuters German business morale deteriorated slightly in September, falling for the fifth month in a row and underlining recession fears in the euro zone39;s largest economy, a survey showed on Monday.

The Ifo institute said its business climate index stood at 85.7, a decline from a revised August figure of 85.8 but above the 85.2 forecast by analysts in a Reuters poll.

The German economy is treading water, Ifo president Clemens Fuest said.

The institute39;s head of surveys, Klaus Wohlrabe, said a thirdquarter contraction was likely, following stagnation in the second quarter.

The German economy is seen at risk of sliding into its second recession in a year after shrinking in the last quarter of 2022 and the first quarter of 2023.

German businesses, as well as politicians and the entire economy, are gradually getting used to the idea that the economy is in for a longer period of subdued growth, ING39;s global head of macro Carsten Brzeski said.

He said the Ifo reading showed an unchanged economic picture, with the Chinese economy still not gaining momentum, high interest rates weighing on activity and continued policy uncertainty regarding the energy transition.

Companies were less satisfied in September than in the previous month with their current business situation, with the subindex falling to 88.7 in September from 89.0 in August.

The Ifo index confirmed that the German economy is extremely weak, Capital Economics senior Europe economist…