(Adds economist comment, background)
BERLIN, April 24 (Reuters) - German corporate sentiment rose in April to its highest level in five months, a closely watched survey showed on Friday, suggesting the downturn in Europe's largest economy may be easing. The Munich-based Ifo economic institute said its business climate index, based on a monthly poll of around 7,000 firms, rose to 83.7 from 82.2 in March. The March reading was revised up from 82.1 previously reported.
The euro
"Is this the end of the crisis? No, it is not, but the free fall of the economy seems to have come to an end, leading to a fragile stabilisation in the second half of the year," said Carsten Brzeski, economist at ING Financial Markets.
Colin Ellis, European economist at Daiwa Securities, said the business climate remained challenging and recent falls in production had yet to feed through into the labour market in the form of higher unemployment.
"As such, spending and activity could take another leg down from the middle of 2009," Ellis said. "The economy is definitely not out of the woods yet."
Highlighting the tough environment, German car parts group Robert Bosch said on Thursday it would slash jobs this year in Germany and abroad as its sales slump as much as 15 percent.
There are some signs of stabilisation, however. The head of engineering sector association VDMA told Reuters last week that Germany's plant and equipment industry, the country's largest industrial employer, is seeing early signs of stabilisation.
An Ifo index on current conditions rose to 83.6 from 82.7 in March -- its first rise in six months. An expectations index rose to 83.9 from 81.6 in March, the fourth rise in a row.
The Ifo report followed an unexpectedly strong survey of German analyst and investor sentiment from the ZEW think tank on Tuesday. The ZEW index rose in April to its highest level in almost two years. (Editing by Mike Peacock)