BERLIN, June 23 Reuters German business morale fell more than expected in June but a recession was not yet in sight despite rising energy prices and the threat of gas shortages, a survey showed on Friday.

The Ifo institute said its business climax index dropped to 92.3 following a reading of 93.0 in May, when the closely watched indicator posted a surprise recovery despite the economic impact of the RussiaUkraine war.

A Reuters poll of analysts had pointed to a minimal fall in June to a reading of 92.9.

Despite increased uncertainty, there are no signs of a recession at the moment, Ifo expert Klaus Wohlrabe told Reuters. However, the threat of a gas shortage has significantly increased uncertainty among companies.

Not all sectors were suffering equally, as manufacturing and trade took significant hits while there was clear improvement in a services sector no longer encumbered by COVID19 lockdowns, the data showed.

However, supply bottlenecks which are slowing down carmakers, for example have eased only minimally and high inflation continued to suppress consumer spending, Wohlrabe said.

Reporting by Rachel More, Rene Wagner and Miranda Murray; Editing by Paul Carrel

Source Reuters