German business sentiment deteriorates in July - Ifo

German business sentiment unexpectedly deteriorated in July, according to a survey released on Thursday by the Ifo Institute.

The Ifo's business climate index fell to 87.0 from 88.6 in June, coming in below consensus expectations for an uptick to 88.9.

Meanwhile, the current conditions index fell to 87.1 from 88.3 and the expectations index dropped to 86.9 in July from 88.8 the month before.

Ifo Institute president Clemens Fuest said: "The German economy is stuck in the crisis."

The manufacturing gauge deteriorated to -14.1 in July from -9.3 the month before, while the service sector index fell to 0.7 from 4.2.

The index for trade came in at -27.8 in July from -23.6 in June and the construction gauge printed at -26.0 versus -25.2.

Andrew Kenningham, chief Europe economist at Capital Economics, said: "The large fall in the German Ifo BCI in July, which follows a similar drop in the composite PMI published yesterday, adds to the impression that the rebound in Germany’s economy earlier in the year has already run out of steam.

"We suspect that GDP growth will be very weak, at best, in the second half of the year."