German investor morale plunges as recession fears rise

(Reuters) - German investor sentiment fell more than expected in May, pointing to a worsening of the already unfavourable economic situation in the next six months.

"As a result, the German economy could slip into a recession, albeit a mild one," ZEW president Achim Wambach said.

The ZEW economic research institute said on Tuesday that its economic sentiment index fell to -10.7 points from 4.1 points in April. A Reuters poll had pointed to a May reading of -5.3.

This brought the ZEW indicator back into negative territory for the first time since December 2022.

The decline is partly due to expectations of further interest rate hikes by the European Central Bank, Wambach said.

The assessment of the current economic situation in Germany also worsened, falling to -34.8 points from -32.5 in April.