German investor morale improved in February, the ZEW economic research institute said on Tuesday, reporting a rise in its economic sentiment index to 19.9 points from 15.2 points in January.
Analysts polled by Reuters had pointed to a February reading of 17.5.
In contrast, the assessment of the economic situation in Germany fell more than expected, to -81.7 points from -77.3 points the month before, below expectations of -79.0 points.
"The German economy is in a bad place. The assessment of the current economic situation by the respondents has deteriorated to the lowest level since June 2020," said ZEW president Achim Wambach.
The German economy contracted by 0.3% in 2023, due to persistent inflation, high energy prices and weak foreign demand, the federal statistics office said last month.
(Reporting by Miranda Murray and Bartosz Dabrowski, Editing by Rachel More)