Berlin, May 24 (IANS): "Sentiment in the German economy has brightened" as the monthly Business Climate Index issued by the Munich-based ifo Institute for Economic Research rose from 91.9 points in April to 93.0 points in May.

"There are currently no observable signs of a recession," Xinhua news agency quoted the institute as saying.

The German economy has "proven itself resilient" in the face of inflation concerns, material bottlenecks and the Russia-Ukraine conflict.

Driven by soaring energy and motor fuel prices, inflation in Germany in April hit 7.4 per cent, a 40-year high, according to official data.

The last time prices increased at comparable speed was during the Iran-Iraq war that started in 1980.

"Risks to the European economy from energy commodity supply disruptions remain very high," said Joachim Lang, chief executive of the Federation of German Industries (BDI), warning that an interruption of Russian gas exports would "stall growth in Europe and send the EU (European Union) into recession."

Meanwhile, Germany's population continues to be concerned over the Russia-Ukraine war.

One in three citizens is afraid that the ongoing crisis would have a lasting impact on economic development, and could possibly lead to recession, according to a recent study by management consultants McKinsey & Company.

To cushion the effects of rising energy prices on consumers and companies, Germany's government has adopted several measures, including an increase in the basic tax-free allowance, higher mileage allowances for long-distance commuters, a discount ticket for public transport as well as a fuel tax cut.