Munich - German business confidence rose less than forecast in May, a key survey released on Monday showed as Europe's biggest economy struggled to fight its way out of recession.

The Munich-based Ifo research institute said its forward-looking business-confidence index rose to 84.2 points from 83.7 points in April. Analysts had expected a bigger increase.

It was the second increase in a row for the closely watched survey, a key indicator of Germany's economic outlook.

Ifo president Hans-Werner Sinn said the May figures indicated the economy had stabilised, albeit at a low level. (dpa)