The mood among German investors worsens in June, according to a study by the Zentrum fur Europäische Wirtschaftsforschung (ZEW), which reflects the weak economic data and trade tensions on a global scale.

ZEW says the economic mood among investors fell to -2.11 points from -2.1 points in May. The economists expected this indicator to drop to -5.9 points. The June survey reported the lowest level since September 2018 and marks a second consecutive month of decline.

The ZEW President Achim Wambach said the sharp decline was linked to the greater uncertainty in the global economy and to the decline in data for the German economy since the beginning of the second quarter.

“The sharp drop in the ZEW Indicator of Economic Sentiment coincides with increased uncertainty regarding the future development of the global economy and substantially worsened figures for the German economy at the beginning of the second quarter. The intensification of the conflict between the USA and China, the increased risk of military conflict in the Middle East and the higher probability of a no-deal Brexit are all casting a shade on the global economic outlook. On top of this, German industry has been reporting worse than expected figures for production, exports and retail sales for April”, said Achim Wambach.

A parallel survey of investors’ assessment of current economic conditions reported a decrease of 8.2 percentage points from May to 7.8 points. Market forecasts saw a possible drop to 6 points.

The weaker-than-expected results on a low investor sentiment add further signs that Germany’s economic growth will be weak this year and that expected recovery in 2020 may be less impressive than projections.

The influential German Ifo Institute cut its growth forecast for 2020 to 1.7% from 1.8%, warning that the recession has begun to spread to other sectors as well.

On Monday, a Bundesbank report showed that the German economy will shrink slightly in the second quarter of 2019.