German economy to slow, but not sharply

Germany's economy is likely to slow due to weak growth in its main export partners, but it will not deteriorate sharply, ZEW economist Christian Dick said on Tuesday, after a survey by the think tank fell for the fourth successive month.

"The German economy, while still in solid and good shape, is still slowing down," Dick said. "It is more a sign of a slowdown than a sharp decrease in economic activity."

A ZEW survey showed German analyst and investor sentiment dropped for a fourth consecutive month in August, undercutting even the lowest forecast in a Reuters poll and indicating that economists expect Europe's largest economy to slow.

"The export situation may become more difficult in the coming months," he added.

The Mannheim-based ZEW economic think tank's monthly poll of economic sentiment slid to -25.5 from -19.6 in July, compared to a median forecast in a Reuters poll of 38 for an unchanged reading. The forecasts in the poll had ranged from -10.0 to -25.0.

"The indicator's decline in August signals that financial market experts still expect the German economy to cool down throughout the next six months. Especially export-oriented sectors may be affected," ZEW said.

Earlier on Tuesday, preliminary data showed German economic growth slowed to 0.3% in the second quarter of the year.

The index was based on a survey of 262 analysts and investors and conducted between July 30 and August 13, ZEW said.