Berlin  - German investor confidence is to fall this month, a key indicator released Tuesday is forecast to say, as concerns set in about the outlook for Europe's biggest economy.

Drawn up by the Mannheim-based Centre for European Economic Research, the ZEW index is forecast by analysts to drop to minus 54.3 in December after posting a surprise jump to minus 53.5 November.

The fall in the ZEW index is expected despite an element of calm returning to global share markets and after an unprecedented wave of rate cuts from around the world aimed at shoring up the global economy.

But the predictions of a gloomy ZEW report for December underscore the sense of uncertainty about the length and depth of the economic downturn, which is rapidly taking hold around the world.

This is particularly the case as the ZEW measures business expectations six months down the track. Many economists believe that the signs of a recovery in the German economy could start to emerge during the second half of 2009.

Based on a survey of about 290 analysts, the ZEW indicator often sets the scene for other major European economic sentiment surveys released later in the month, including Germany's closely watched Ifo business confidence survey.

Tuesday's release of the ZEW survey also comes as a steady stream of economic data indicating that the downturn in the German economy has been gaining momentum.

Germany's statistics office is predicted to say Tuesday that the nation's exports plummeted in October as a fast contracting global economy hit German industry.

As the world's leading export nation, the latest German trade figures are likely to underscore how vulnerable Germany is to slumping global growth.

The German economy will contract by 0.8 percent next year, led by a slump in exports, the nation's central bank, the Bundesbank said in its latest economic projections.

German industrial production dropped sharply in October with the Economics and Technology Ministry saying Monday output in the nation slumped by 2.1 per cent.

Analysts had expected a more modest fall in October of about 2 per cent.

Data released last week showed key German factory orders plunging in October.

The Ministry for Economics and Technology said German industrial order books contracted by a hefty and far bigger-than-expected 6.1 per cent month on month in October after shrinking by a revised 8.3 per cent in September. (dpa)