German business confidence fell to its lowest level in 11 months in January, the Munich-based Ifo think tank's most recent monthly index revealed on Monday.

The closely-watched business climate barometer showed a reading of 107.3 points this month, down from 108.6 points in December.

"German business leaders are looking to the new year with some anxiety," outgoing Ifo President Hans-Werner Sinn said in a statement.

He noted that the poll among 7,000 executives in the country had clearly revealed that their outlook for the next six month was clouding over. Their assessment of the current situation was also worse than it was toward the end of last year, he said.

Unemployment in Germany in comparison to the World and the EU

Robust labor market

Ifo researchers attributed the second monthly drop in a row to frequent stock market routs over the past few weeks.

They said the economic slowdown in China and some other emerging markets had dampened executives' spirits, adding that managers were also concerned about a likely destabilization of oil producing nations such as Russia in the wake of shrinking crude prices.

Nonetheless, analysts expect the German economy to expand by 1.7 percent this year as strong domestic consumption shows no signs of waning.

This is because of record-high employment in Europe's powerhouse, wage hikes in many sectors and low fuel prices, a boon for car-owning consumers.

hg/cjc (AFP, Reuters)