German business sentiment deteriorated more than expected in August, hitting its lowest level since November 2012, a survey showed on Monday, in a further sign that Europe's largest economy is sliding toward a recession.

The Ifo institute said its business climate index fell to 94.3 from an upwardly revised 95.8 in July. The August reading, the fifth monthly decline in a row, undershot a consensus forecast for 95.1.

"There are ever more indications of a recession in Germany," Ifo President Clemens Fuest said in a statement. Companies were much less satisfied with their current situation and their pessimism about the coming months also increased, he added.