BERLIN (Reuters) - German investor sentiment fell by more than expected in October as a triple whammy of coronavirus, Brexit and U.S. election angst increased uncertainty about the outlook for Europe's largest economy, the ZEW economic research institute said.
The survey of investors' economic sentiment fell to 56.1 from 77.4 points the previous month, ZEW said on Tuesday. A Reuters poll had pointed to a fall to 73.0.
"The recent sharp rise in the number of COVID-19 cases has increased uncertainty about future economic development, as has the prospect of the UK leaving the EU without a trade deal," ZEW President Achim Wambach said in a statement.
"The current situation in the run-up to the presidential election in the United States further fuels uncertainty."
A separate gauge of current conditions rose to -59.5 from -66.2 points the previous month. That compared with a consensus forecast of -60.0 points.
The German economy contracted by 9.7% in the second quarter as household spending, company investments and trade collapsed at the height of the pandemic.
An easing of lockdown measures, coupled with an unprecedented array of rescue and stimulus packages, led to a robust recovery in the third quarter, but a spike in new coronavirus cases has caused concern activity could slow again.
The ZEW sentiment index last fell in July.
Wambach said "the great euphoria witnessed in August and September seems to have evaporated."
Chancellor Angela Merkel said she and mayors from Germany's 11 largest cities agreed on Friday to adopt stricter anti-coronavirus measures if infections exceed a threshold of 50 cases per 100,000 population in a week.
The Ifo institute expects 6.6% output growth in the third quarter, then a slowing to 2.8% in the fourth quarter.