Germany's business climate index dipped to a 29-month low in October, but was stronger than the market forecast, according to a Munich-based research institute on Tuesday.
The Ifo Business Climate Index edged down to 84.3 in October from September's revised reading of 84.4.
"The German economy is facing a difficult winter," the research institute said amid the arriving recession.
The market forecast a larger decrease in the main reading with the index projected to be at 83.8 in the month.
Meanwhile, companies' expectations improved compared to a month ago.
The Ifo Business Expectations Index rose to 75.6 in October, up from 75.3 in September.