German economic sentiment deteriorated more-than-expected to a four-month low in July, survey data from the Mannheim-based Centre for European Economic Research/ZEW revealed Tuesday.

The ZEW Indicator of Economic Sentiment fell to 17.5 in July from 18.6 in June. The score was forecast to drop to 18.0.

This was the lowest reading since March, when the score was 12.8.

The assessment of the current economic situation also weakened in July. The corresponding index decreased by 1.6 points to 86.4.

"Our overall assessment of the economic development in Germany remains unchanged compared to the previous month," ZEW President Achim Wambach said.

"The outlook for the German economic growth in the coming six months continues to be positive. This is now also reflected in the survey results for the eurozone."

The expectation indicator for the euro area slid 2.1 points to 35.6 in July. By contrast, the current economic situation index gained 8.2 points to 28.7.

Since November 2016, the indicator for the economic situation in the Eurozone has been steadily increasing, now reaching its highest level since January 2008, ZEW said.

July's dip in German investor sentiment presumably reflects the recent tightening of financial market conditions in response to the European Central Bank's talk of policy normalization, Jennifer McKeown at Capital Economics, said.

But this cannot be considered as a sign of an economic slowdown to come, the economist added.

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