Berlin - Business confidence in Europe edged down again in January, economists expect a key survey to be released Tuesday to say, as the economic gloom deepens in boardrooms across Europe's biggest economy.

A major test of the economic mood in the Europe, the closely- watched Ifo business confidence index is forecast to have marked the start of the new year by slipping to 81.5 points this month.

Based on a survey of 7,000 German executives and drawn up by the Munich-based Ifo economic research institute, the index plummeted in December to 82.6 points, which was its lowest point since the 1980s oil crisis.

Since the publication of the December survey, a slew of bleak indicators and data have continued to roll in.

But while the business leaders' assessment of the current climate in Germany is forecast to drag the index down again this month, the indicator's component gauging expectations six months down the track is predicted to rise on hopes of an economic pickup later in the year.

Indeed, analysts predict that the Ifo's gauge measuring business conditions will slide from 88 to 85 in January. At the same time, however, the expectations' component is forecast to increase from 76.8 to 78 points.

Predictions of an increase in the expectations gauge come amid signs that the severe downturn that has hit Germany and the world economy in recent months could be reaching its low point.

Indeed, hopes have been rising that the round of hefty global interest rate cuts, falling oil prices and government stimulus packages would help to form the basis of an economic pickup later in the year. (dpa)