Morale dips to 88.6 vs 89.7 forecast
Unexpected fall in expectations
Analyst Figure as bad as it looks

BERLIN, June 24 Reuters German business morale unexpectedly fell in June amid increasing pessimism about the performance of Europe39;s largest economy, a survey of around 9,000 managers showed on Monday.

The Ifo institute said its business climate index declined to 88.6 in June from 89.3 in May, compared with a reading of 89.7 forecast by analysts in a Reuters poll.

The German economy is having difficulty overcoming stagnation, said Ifo president Clemens Fuest.

The expectations index dropped to 89.0 in June from a slightly revised 90.3 the month before. Analysts had expected that index to rise to 91.0.

This figure is as bad as it looks, said LBBW bank economist JensOliver Niklasch, as expectations are deteriorating again from an already low level in contrast with the recent trend toward forecast increases.

It is currently unclear where the hopedfor growth spurt for 2025 will come from, added Niklasch.

LACK OF MOMENTUM?

Ifo slightly raised its 2024 economic forecast to 0.4 last week, predicting that the German economy the weakest performer among big euro zone countries last year would begin to recover over the year and reach 1.5 growth in 2025.

The optimism at the start of the year has given way to realism, said ING analyst Carsten Brzeski, who pointed to the latest purchasing managers39; index and Ifo readings as showing that the German economy is…