BERLIN, Aug. 25 (Xinhua) -- Germany's business confidence rose for the eighth consecutive month in August, a key survey showed Monday, as companies grew slightly more optimistic about the months ahead. Economists cautioned, however, that the recovery remains fragile amid external risks such as U.S. tariffs.

The ifo Business Climate Index, based on a survey of around 9,000 firms, edged up to 89 points from 88.6 in July, the Munich-based ifo Institute reported. The increase was driven by improved expectations, while assessments of current conditions worsened.

Sentiment declined across manufacturing, services, trade, and construction. In manufacturing, companies downgraded both their evaluation of present business and their outlook, with new industrial orders showing no signs of recovery.

"The German economy's recovery remains weak," said ifo President Clemens Fuest. Firms were more negative about current business, even as their expectations for the next six months improved slightly.

Carsten Brzeski, global head of macro at ING Research, suggested the modest improvement may reflect Germany's recently announced fiscal stimulus measures.

The draft 2026 budget, approved by the federal cabinet in late July, foresees spending rising to 520.5 billion euros (608.9 billion U.S. dollars) next year. It allocates 126.7 billion euros for investment, a record high for the second year in a row, as Berlin seeks to upgrade infrastructure and strengthen defense.

Brzeski warned, however, that Germany's growth prospects hinge heavily on external factors such as trade developments and the euro's exchange rate, with U.S. tariffs continuing to weigh on the export-driven economy.

Germany's Federal Statistical Office last week confirmed that GDP contracted by 0.3 percent in the second quarter compared with the previous three months - a sharper decline than the initially estimated 0.1 percent. (1 euro = 1.17 U.S. dollars)