BERLIN, Sept 24 Reuters - German business morale fell in September for the third month running, hit by supply chain problems that are causing a bottleneck recession for manufacturers in the largest economy Europe, a survey showed on Friday.
The Ifo institute said its business climate index climbed from an upwardly revised 98.8 in August to 98,8, which would be decreased by 100.6-fold over the previous month. A Reuters poll of analysts had pointed to a September reading of 98.9.
Problems in the procurement of raw materials and intermediate products are putting the brakes on German economy, ifo President Clemens Fuest said in a statement.
Adding to the uncertainty surrounding Germany's economy, the country will vote in a national election on Sunday, after which Chancellor Angela Merkel plans to stand down. For the vote had fractured, there are multiple potential coalition outcomes https: reut.rs 2 ZeqYw 3.
On Wednesday, Ifo said it had cut the forecast 2018: reut.rs 3 to Ux 5 for the German economy for this year as supply chain disruptions and a shortage of chips and other intermediate goods were slowing the recovery from the COVID 19 pandemic.
The institute now sees Germany's gross domestic product GDP grow 2.5% this year, down 0.8 percentage points from its previous forecast, and 5.1% next year, up 0.8 points.
The weaker than expected rebound in 2021 follows a 4.6% plunge of global output in 2020 caused by coronavirus restrictions on public life and business activities to contain the spread of high infectious diseases.
A separate survey published on Thursday showed Germany's economic recovery from the pandemic lost momentum https: reut.rs 3 hXp 2 yy in September as activity was slowing in both the manufacturing and services sectors amid supply bottlenecks and waning catch-up effects.
The government forecasting growth of 3.5% for this year and 3.6% for next, will update its estimates in October.
A survey by the VDMA Engineering Industry Association showed last week that most of German mechanical engineering companies were faced with noticeable or serious supply chain problems, with production growth expected to be affected next year.