Berlin  - German business confidence racked up its fifth consecutive monthly rise in August, economists expect a key survey to be released Wednesday to say amid signs a recovery is gaining ground in 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 88.8 points in August after surging more than forecast to 87.3 in July.

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

The publication of the latest Ifo index comes less than two weeks after data showed Germany unexpectedly climbing out of recession in the second quarter to post a 0.3-per-cent economic growth rate.

This added to evidence that hard German economic data was starting to catch up with improving forwarding-looking sentiment surveys, which have been pointing to the nation's economy gaining strength in the runup to the end of the year.

Analysts predict that the rise in the August Ifo index will be driven by jumps in the indicators' components gauging both business expectations six months down the track and current economic conditions.

The release of the latest Ifo survey comes ahead of the publication of Thursday of a new German consumer confidence survey, which is tipped to show the mood in the nation's households also improving.

The GfK marketing institute's report is projected to show consumer confidence in Germany edging up to 3.7 points in September from 3.5 points in August.

Last week the Mannheim-based Centre for European Economic Research (ZEW) said its monthly index measuring the mood among analysts and institutional investors jumped this month by 16.6 points to 56.1 points, its highest level in more than three years. (dpa)