German investor confidence rose less than expected in June, a key survey said Tuesday, after Europe's top economy saw an uptick in inflation following months of decline.

The ZEW institute's closely-watched economic expectations index edged up to 47.5 points, from 47.1 points in May.

Although it was the index's 11th consecutive increase, analysts surveyed by FactSet had been expecting a bigger improvement in morale to 49.5 points.

Investors' assessment of Germany's current economic situation meanwhile "has slightly deteriorated", the institute said, with the index falling by 1.5 points to minus 73.8 points.

The disappointing readings came amid a stagnating economic situation assessment "for the eurozone as a whole," said ZEW president Achim Wambach.

At the same time, inflation expectations were on the rise again after inflation data in May "turned out higher than what was expected," he added.

Germany's annual inflation rate climbed to 2.4 percent in May, the first increase in six months.

Analysts said it was mainly due to one-off factors, and the European Central Bank this month went ahead with its first interest rate cut since 2019 as it sees eurozone inflation on track to returning to its two-percent target.

The German economy shrank in 2023 as it battled headwinds including high energy prices, elevated interest rates and cooling exports.

The government expects a modest recovery to get under way this year as demand picks up on the back of falling inflation and lower rates, forecasting growth of 0.3 percent.