Weak growth dampens German investors' confidence

The confidence of German investors was dampened by a weak growth of German economy at the start of 2015 and fell for the second consecutive month in May, a survey found on Tuesday.

An indicator measuring investors' expectation for German economic performance in the next six months decreased by 11.4 points from the reading of previous month to 41.9 points in May, said Mannheim-based Center for European Economic Research (ZEW).

"Financial market experts have adjusted their optimistic expectations downward in May due to unexpectedly poor growth figures in the first quarter of 2015 and turmoil on the stock and bond markets," said ZEW Clemens Fuest in a statement.

In the first three months of 2015, the German economy expanded by only 0.3 percent thanks mainly to domestic demand. In the last quarter of 2014, the Europe's biggest economy grew by 0.7 percent.

According to Fuest, however, German investors remained optimistic about the future economic performance. "Only a small number of survey participants actually expect a deterioration of the economic situation," he said.

Earlier on Tuesday, German federal statistical office Destatis reported that the number of employed persons in Germany in the first quarter increased by 0.7 percent year on year, signaling that the labor market of Germany remained stable.

German government expected the economy to grow by 1.8 percent in the current year. Domestic demand supported by a stable labor market, increasing wages, low interest rates and falling energy prices was seen as the main driving force. Endit