German business confidence hits lowest point in 5 years

German business confidence declined to the lowest level in more than five years in October as the deepening financial crisis dimmed the outlook for economic growth.

The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, fell to 90.2 from 92.9 in September. Economists expected a drop to 91, the median of 23 forecasts in a Bloomberg News survey showed.

The German economy is struggling to recover from a second-quarter contraction after the global financial crisis froze credit markets, sapped consumer spending and damped demand for European exports. Stocks tumbled around the world last week on concern an economic slump will damage earnings.