German investor morale rises more than expected in July, ZEW finds

The assessment of the current economic situation also rose in July, though it remained in negative territory at minus 77.6 points. In June that reading had been at minus 81.0 points.

"The German economy has turned the corner," said Thomas Gitzel, chief economist at VP Bank. "The situation is significantly better than the sentiment suggests."

He said retail sales, industrial orders and industrial production had all increased in May and as a result, GDP might even show slight growth in the second quarter.

"Nevertheless, the uncertainty associated with the developments in the Iran conflict and the oil price remain a crucial factor affecting the prospects for a recovery of the German economy," Wambach said.

The survey was conducted in the period from July 13 to July 21. Current developments in the Middle East are likely underrepresented in the survey, said Alexander Krueger, chief economist at Bethmann Hal.