(RTTNews) - German investor confidence for June weakened to the lowest level in 15 years, survey showed Tuesday.

The latest survey from the Centre for European Economic Research, or ZEW revealed that the Economic Sentiment Indicator for June dropped 11 points to minus 52.4 from minus 41.4 points in May. The index stood well below its historical average of 29.2 points and reached the lowest since December 1992.

A continuous fall in incoming orders suggests that Germany’s economic momentum slowdown in the next six months. Higher prices for energy and food reduced the purchasing power of consumers. Further, the financial crisis and a potential interest rate hike by the European Central Bank could worsen loan conditions for companies.

ZEW President, Wolfgang Franz stated, “The expectations of the financial market analysts are strongly influenced by the current forecast of a weaker economic momentum in 2009. Against this background, it is all the more important that Germany’s Federal Government keeps on the right track in its economic policy and does not jeopardize what has already been achieved.”

The indicator that assesses the current economic situation eased to 37.6 points from 38.6 points registered in May, while economists were looking for a reading of 37 points.

Meanwhile, the economic expectations index for the Eurozone dropped to minus 52.7 points from minus 43.6 in the previous month and the indicator for the current economic situation in the Eurozone stood at 7.9 points, down 3.5 points.

Annual inflation in May reached the 3% threshold for the second time this year. Inflation in the largest economy in the eurozone continues to stay above the European Central Bank target, which is to keep inflation rates “below, but close to, 2% over the medium term”.

Earlier in a note, economists at BNP Paribas said the GDP growth in the second quarter is expected to be very weak due to corrections of the elements that had temporarily boosted activity at the beginning of the year and deceleration of manufacturing output and exports.

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