BERLIN, May 22 (Reuters) - German business morale

improved slightly more than expected in May, a survey showed on

Thursday, thanks to less gloomy expectations.

The Ifo institute said its business climate index rose to

87.5 in May from 86.9 in April.

Analysts polled by Reuters had forecast a rise in the

reading to 87.4.

"The German economy is slowly regaining its footing," Ifo

president Clemens Fuest said.

The improvement in business morale was mainly due to a

rise in expectations to 88.9 in May from 87.4 in April.

However, current conditions fell to 86.1 from 86.4 in

the previous month.