German business sentiment rises more than expected in August, Ifo survey finds

German business morale ‌grew ​more than expected in August, a survey showed on Tuesday, adding to signs that Europe's ‌largest economy is on track for a long-awaited recovery. The Ifo institute said its business climate index rose to 88.8 in August from a slightly ‌upwardly revised 86.7 in July.

Analysts polled by Reuters had forecast ‌an increase to 87.2. "Despite the renewed rise in energy prices, the German economy is recovering," Ifo President Clemens Fuest said.

Germany's gross domestic product grew by ⁠0.3% ​in the ⁠second quarter of 2026 compared with the previous quarter, slightly above last month's preliminary reading ⁠of 0.2%, statistics office data showed on Tuesday. This data, together with Ifo's ​increase, further firms up tentative signs of a recovery in Germany's ⁠languishing economy, following a stronger-than-expected rise in investor morale last week, as well as ⁠exports ​and industrial production that beat expectations in June.

Economic expectations in the Ifo survey also rose, to 89.1 in August from ⁠86.8 in July. Companies were more satisfied with their current business performance, with the ⁠index rising ⁠to 88.5 in August from 86.5 in July.

Business sentiment improved across all economic sectors, the survey showed.