German investor morale darkened more than expected in August, posting its strongest decline in two years, the ZEW economic research institute said on Tuesday.
The economic sentiment index fell to 19.2 points from 41.8 points in July. Analysts polled by Reuters had pointed to a reading of 32.0.
"The economic outlook for Germany is breaking down," said ZEW president Achim Wambach.
Economic expectations are still affected by a high level of uncertainty, driven by ambiguous monetary policy, disappointing business data from the US economy and growing concern about an escalation of the conflict in the Middle East, Wambach said.
The assessment of the current economic situation in Germany also declined, falling to minus 77.3 points from minus 68.9 in the previous month.
