German industrial production fell for a third straight month in July, official data have shown, adding to fears of a prolonged downturn in Europe's largest economy.

Thursday's statistics show that output fell by 0.8 percent compared with the month before, according to seasonally adjusted figures from statistics agency Destatis, following a 1.4-percent drop in June.

Analysts surveyed by FactSet had forecast a smaller decline of 0.35 percent.

Germany's crucial industrial sector has been facing a series of headwinds in recent months, as inflation and high energy prices combined with a weakening Chinese economy take their toll on the export powerhouse.

Recession

The German economy slipped into a recession at the turn of the year and stagnated in the second quarter.

The International Monetary Fund has forecast that Germany will be the only major advanced economy to shrink in 2023.

The July industrial output reading comes a day after figures released by Destatis showed a steeper-than-expected plunge in industrial orders for July.

The latest data "underscores the ongoing crumbling of the economy," said LBBW economist Jens-Oliver Niklasch.

"The third quarter is likely to bring a decline in economic output," he added.