BERLIN (Reuters) -German business morale unexpectedly fell in July, amid increasing pessimism about the performance of Europe's largest economy, a survey of around 9,000 managers showed on Thursday.

The Ifo institute said its business climate index sank to 87.0 in July from 88.6 in June, compared with a reading of 88.9 forecast by analysts in a Reuters poll.

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

The current conditions index fell to 87.1 from 88.3 in the previous month. Analyst polled by Reuters expected the index to rise to 88.5

Scepticism has also increased noticeably with regard to the coming months. The expectations index dropped to 86.9 in July from 88.8 in June. Analysts had expected that index at 89.0.