A new survey released this week indicates the the business sentiment in Germany has deteriorated for the first time since August, as the country now faces a longer recession than had been forecast by analysts.

In December, the business expectations index in Germany fell to 84.3, compared to 85.1 in November, marking a deeper than forecast drop in the survey by Munich’s Ifo Institute for Economic Research.

The president of the think tank, Clemens Fuest, said in an interview with Bloomberg, “The economy is weak, and we’ve been waiting for a recovery now for some time, and it’s not coming. This is worrying.”

Meanwhile, hopes of a recovery early next year are diminishing, as the country appears poised for a recession in the second half of the year due to weakening domestic demand and declining sentiment among exporters.

Although analysts have forecast a stagnation in Europe’s second largest economy, the new data would seem to make a second consecutive contractions appear the more likely scenario.

According to Fuest, the situation is deteriorating, as the recent budget crisis has produced more “uncertainty about economic policy going forward.”

The government has recently been forced to freeze most of its new spending commitments following a ruling by the Constitutional Court which declared that the repurposing of €60 billion ($65 billion) which had been left over following the Covid-19 pandemic was unconstitutional.

Fuest added, “What we would need is a convincing economic policy strategy to get back to growth, a strategy for a recovery. And this strategy is missing completely.

A separate survey conducted by S&P Global found private sector activity had deteriorated, and business activity in the services sector had endured a further downturn.