Sentiment still in negative territory
Recession 39;not alarming39; but headwinds stubborn
Current assessment worsens markedly

BERLIN, June 13 Reuters A modest improvement in investor morale in June fuelled hopes on Tuesday that Germany39;s current recession could be a mild one, but economists were quick to warn that there was no considerable turnaround on the horizon.

The ZEW economic research institute39;s economic sentiment index remained in negative territory at 8.5 points in June, up from 10.7 points in May. A Reuters poll had forecast a decline to 13.1..

Experts do not anticipate an improvement in the economic situation during the second half of the year, ZEW president Achim Wambach said, warning of persistent headwinds as exportfocused sectors struggled with a weak global economy.

The improvement came after three consecutive months of decline, and as Germany struggles with more persistent economic challenges after initially fending off a muchfeared energy crunch in the winter of 202223.

Europe39;s largest economy slipped into recession in the first quarter of this year, as spending by inflationhit consumers failed to offset other headwinds, including the abrupt end to Russian energy imports following the Ukraine invasion.

Recent economic data added to the cloudy outlook, with an unexpected drop in industrial orders and weakerthanforecast retail sales in April.

However, Wambach said the current recession was generally not considered particularly alarming….