The mood among German analysts and investors worsened unexpectedly in May as risks, including a possible British exit from the European Union, cloud the outlook in Europe's biggest economy.
This is according to the latest survey from the ZEW think tank.
Mannheim-based ZEW said its monthly survey showed a fall in its economic sentiment index to 6.4 points in May from 11.2 the previous month. That compared with the Reuters consensus forecast for a rise to 12.
A separate gauge of current conditions rose to 53.1 points from 47.7 in April, coming in stronger than the Reuters consensus forecast for a reading of 48.9.
"Uncertainties such as a possible Brexit do not allow a more optimistic outlook," ZEW president Achim Wambach.
He added investors had doubts that the German economy would continue to grow at the same pace after a surprisingly strong first quarter rate of 0.7%.
The ZEW index was based on a survey of 211 analysts and investors conducted May 9-23.
Consumer spending, investment drive German growth
The German economy, Europe's biggest, grew at its fastest rate in two years in the first three months of 2016, driven primarily by rising investment and household spending, data shows.
German gross domestic product (GDP) expanded by 0.7% in seasonally and calendar-adjusted terms in the period from January to March, the federal statistics office Destatis said in a statement.
This confirmed a preliminary estimate released two weeks ago.
It was also faster than the growth of 0.3% notched up in the preceding quarter, the statisticians said. "Positive impulses came primarily from domestic demand," they said.
Investment, in particular, increased by 2.3%, with investment in equipment rising by 1.9% and construction investment up 2.3% on account of the mild weather.
Private consumer spending increased by 0.4% and public spending rose by 0.5%.
Exports grew by 1% in the three-month period, but because imports rose even more strongly, by 1.4%, foreign trade overall trimmed 0.1% off the headline growth rate, Destatis said.
