German sentiment hits 20-month low

German investors' morale has fallen to its lowest level since February 2009 because of fears that growth in Europe's largest economy will slow.

The ZEW think-tank said its monthly poll of economic sentiment fell to -4.3 in September from 14.0 in August, well below forecasts for a slip to 10.0. The fall into negative territory indicates that more analysts now have a pessimistic view of sentiment six months ahead than an optimistic one.

"This may not indicate a temporary slowdown but could well be the first sign of a flattening of economic activity," ZEW said.

Germany's economy quickly emerged from last year's recession, surging 2.2 per cent in the second quarter.