German economic sentiment improved unexpectedly in January, but an index of current conditions tumbled to a four-year low, underlining concerns over the health of the euro zone's largest economy.
The ZEW Centre for Economic Research said that its index of German economic sentiment rose to -15.0 points this month from a reading of -17.5 in December.
Analysts had expected the index to fall to -18.4 points.
However, the Current Conditions Index dropped to 27.6 from 45.3, much worse than expectations for a reading of 43.5.
On the index, a level above 0.0 indicates optimism, a level below 0.0 indicates pessimism.
Recent data showed that the German economy only narrowly avoided slipping into recession at the end of last year, amid global trade conflicts, messy Brexit negotiations and the after-effects of the diesel emissions scandal on its auto sector.
