The Ifo Business Climate Index for industry and trade in Germany fell to 109.7 points in June, the lowest level this year, the Ifo institute said on Tuesday.
This is the second consecutive month for the index, considered as the most important barometer for the German economy, to fall from 111.2 points in April to 110.4 points in May and then to 109.7 points in June, which is even worse than the expected level of 110.3 points, the Munich-based think tank said.
"The current business situation was well rated as before." Ifo president Hans-Werner Sinn said.
However, surveyed companies are becoming less optimistic about the expectation of the course of business in future, according to Ifo's newly released report, based on a monthly survey of about 7,000 firms.
The mood for wholesale and for retail brighten noticeably. And the mood for construction rises slightly after four consecutive falls. However, the mood for the branch of industry falls obviously, while surveyed companies rated their actual situation not as good as it was in May.
"The German economy fears the possible impact of the crisis in Ukraine and Iraq," Sinn explained.