The German ZEW institute's gauge of investor optimism in Europe's largest economy rose for the first time this year but was still below market forecasts.
The Mannheim-based think tank said today its measure of how analysts and investors expect the German economy to develop in the next six months rose to 47.4 points from 46.4 in May.
The consensus forecast among analysts on Friday was for a rise to 48.0. Forecasts ranged from 44.0 to 58.0. "The result is disappointing," ZEW President Mr Wolfgang Franz said in a statement.
"The good news was that the downward trend in expectations has stopped for now. But the hopes of a strong increase have not been met, although some real economic indicators point in the direction of an economic recovery," he added.
ZEW said its survey of 310 analysts and investors showed them to be more optimistic about the actual business climate in Germany, with the current situation indicator rising to minus 69.8 points from minus 75.9 points in May.
But it said the measured rise in the forward looking expectations indicator showed fears of interest rate hikes to counter oil-price driven inflation may be weighing on sentiment.
Its euro zone expectations indicator dipped to 56.8 points from 59.2 points.
The survey showed a small rise in the number of analysts expecting an increase in euro zone interest rates, although the majority still expect no change in the next six months.