Violence in Ukraine and Iraq has German companies worried about the effect that will have on them.
As a result the country’s main index of business sentiment weakened more than expected in June.
The Ifo think tank got more pessimistic responses to its monthly survey of 7,000 firms.
So its business climate reading was down for the second straight month.
German firms have been concerned since early this year about tensions in Ukraine, fearing that tougher sanctions against Russia could hurt their business.
Iraq’s fight against a Sunni insurgency has pushed up oil prices on worries that supplies could be disrupted.
“Global uncertainties are taking their toll,” said economist Holger Schmieding of Berenberg bank. “Germany’s domestic fundamentals remain solid,” he added, pointing to strong employment, low inflation and buoyant construction.
“(But) we need to watch the situation in Ukraine, Russia and Iraq carefully.”