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Germany's Economic Sentiment Weakens Unexpectedly

Germany's economic sentiment weakened unexpectedly in May, survey data from the ZEW-Leibniz Centre for European Economic Research showed on Tuesday.

The economic sentiment index fell to -2.1 in May from +3.1 in April. The reading was expected to rise to 5.0.

Meanwhile, the current conditions index rose more-than-expected to 8.2 from 5.5 points a month ago. The expected score was 6.0.

"The decline in the ZEW Indicator of Economic Sentiment shows that the financial market experts continue to expect restrained economic growth in Germany for the next six months," ZEW President Achim Wambach, said.

The most recent escalation in the trade dispute between the USA and China again increases the uncertainty regarding German exports - a key factor for the growth of the gross domestic product, Wambach added.

Nonetheless, ZEW said the development of production and exports in Germany as well as Eurostat's most recent flash estimate of GDP growth in the euro area in the first quarter give rise to the hope that the German economy, too, has grown more strongly than expected in the first quarter.

The financial market experts' sentiment concerning the economic development of the Eurozone also experienced a drop. The corresponding indicator slid 6.1 points to -1.6 points in May.

By contrast, the indicator for the current economic situation in the Eurozone climbed 6.2 points to -7.0 points in May.

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