Berlin  - German business confidence edged up again in July, economists expect a key survey to be released Friday to say, amid signs that the global recession is loosening its grip on Europe's biggest economy.

In a major test of the economic mood in Europe, the closely- watched Ifo business confidence index is projected to rise to 86.4 points in July after surging to a seven-month high in June of 85.9.

Drawn up by the Munich-based Ifo economic research institute, the index is based on a survey of 7,000 German executives.

Analysts predict that both a rise in the Ifo indicators' components gauging business expectations six months down the track and current economic conditions will result in the overall index recording its fourth consecutively monthly rise in July.

But another key German sentiment survey released last week showed investor confidence reporting a surprise fall in July, underscoring the fragile state of the nation's economy.

The Mannheim-based Centre for European Economic Research (ZEW) said its monthly forward-looking index measuring the mood among analysts and institutional investors slumped 5.3 points to 39.5 amid concerns that the credit crunch could stifle recovery in the nation's economy. (dpa)