Germany's economy grew slightly more than anticipated in the second quarter.
But a closely watched measure of investor confidence dropped unexpectedly, indicating fears are growing that the euro crisis will become an increasing drag on the bloc's largest economy.
The Federal Statistical Office said the German economy grew 0.3% in the second quarter.
That was better than expectations of a 0.2% increase though slowing from the first quarter's 0.5% growth.
A clearer breakdown of the figures will not emerge until later this month. However, the statistics office said exports and public consumption combined with lower unemployment to lift growth.
One downbeat indicator was a fall in investment in machinery and equipment, a possible sign that firms are getting less confident about the future.
That pessimism came through in the ZEW institute's forward-looking report on investor confidence.
This showed a drop in economic sentiment to -25.5 points in August from -19.6 points the month before.
Economists had been expecting a slight improvement in the index.
''The indicator's decline in August signals that financial market experts still expect the German economy to cool down throughout the next six months," ZEW said in its report.
"Especially export-oriented sectors may be affected," it added.
The decline took the ZEW indicator to its lowest level in 2012, though it remains well above its lows hit of below -60 points that it hit during the financial crisis in 2008.
The survey, which polled 262 institutional investors and analysts, also found that the assessment of the current situation in Germany fell 2.9 points in August to 18.2 points overall.
The German economy has so far managed to withstand the effects emanating from the debt crisis on its doorstep but many economists are worried it will soon be dragged down as well. With many euro countries in recession, demand for Germany's high-value exports may start to falter.
The 17-country euro zone a whole contracted 0.2% in the second quarter. However, the better-than-expected German figures coupled with news that France's economy did not contract during the quarter as had been widely feared, may help the euro zone avoid shrinking during the quarter.
The German government is predicting overall growth of 0.7% this year, though others, like the International Monetary Fund and Germany's central bank, are forecasting slightly more robust gains.
