German investor confidence this month fell for a second consecutive month, signalling concern that the fragile recoveries in neighbouring countries pose a risk to Europe's largest economy. The ZEW Centre for European Economic Research said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, slid to 55.7 from 61.7 in January, after reaching a seven-year high of 62 in December. Economists forecast a decline to 61.5, the median estimate in a survey showed. While German economic growth of 0.4 per cent in the fourth quarter exceeded analysts' estimates, investors are still cautious about the rest of the euro area, the nation's biggest trading partner. Regional unemployment near a record high, shrinking bank lending and persistently low inflation prompted the European Central Bank to say it may ease policy as soon as next month to support a subdued recovery. "I wouldn't put too much emphasis on a small decline" in investor confidence, said Thilo Heidrich, an economist at Deutsche Postbank. "It's more of a stabilisation than a turn in sentiment. We're at very high levels, the highest we've seen since the financial crisis." ECB president Mario Draghi put investors on a month's notice for further stimulus on February 6, saying policymakers are willing and ready to act if needed. Officials, who kept the benchmark rate at a record low of 0.25 per cent, hold their next rate-setting meeting on March 6. At the same time, the regional recovery is showing signs of strengthening. European new car sales advanced for a fifth month in January, the European Automobile Manufacturers Association said yesterday. Registrations rose 7.2 per cent in Germany.