Munich, Aug 7: The Ifo economic index for the euro area has declined to 124 points in the third quarter from 129.2 points in the previous quarter.
"The six-month economic outlook clouded over markedly, although assessments of the current economic situation brightened slightly," Xinhua quoted Hans-Werner Sinn, president of the Ifo institute, as saying on Thursday.
"The economic recovery in the euro area economy will lose momentum," Sinn said.
Assessments of the current economic situation improved everywhere except Germany, Finland and Lithuania, but remained favourable in Germany.
Meanwhile, the six-month economic outlook in most euro countries was less positive than three months ago.
The forecast of an average inflation rate for 2015 in the euro area rose to 0.8 percent from 0.6 percent.
Ifo is one of Europe's leading research institutes. Its business climate index is considered as most important barometer for the German economy.