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German business morale unexpectedly rises in May despite Ukraine war

* Rise bucks expectations for a small fall

* Ifo sees "no observable signs of a recession" (Adds detail)

BERLIN, May 23 (Reuters) - German business morale rose unexpectedly in May, as Europe's largest economy showed resilience in the face of high inflation, supply chain problems and the war in Ukraine, a survey showed on Monday.

The Ifo institute said its business climax index rose to 93.0 in May following a reading of 91.9 in April, revised up slightly from 91.8.

A Reuters poll of analysts had pointed to a May reading of 91.4.

Ifo said in its statement it currently saw "no observable signs of a recession".

Data released last Friday showed German producer prices saw their highest-ever annual rise in April -- surging 33.5% on the year -- as the Ukraine war sends the cost of energy spiralling for German industry.

German Finance Minister Christian Lindner, hosting a meeting of the Group of Seven economic powers last week, said inflation needed to get back to 2% quickly and that central banks had a "great responsibility" to help get it under control in the G7.

Volkswagen, Europe's top carmaker, earlier this month stuck to its outlook for 2022, shrugging off supply chain disruptions caused by the war in Ukraine and the pandemic by drawing on its global production network. (Reporting by Miranda Murray and Rachel More Editing by Paul Carrel)

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