Evidence that the eurozone debt crisis is beginning to hurt the German economy sent investor confidence in Europe\'s largest economy to a three-year low, data showed on Tuesday. The ZEW economic think-tank said in a statement that its closely watched economic expectations index fell by 5.0 points to stand at minus 48.3 points in October, its lowest level since November 2008. The decline was steeper than expected: analysts polled by Dow Jones Newswires had been pencilling in a reading of minus 45 points for October. The index had already shed 5.7 points the previous month and it was the eighth month in a row that the indicator has fallen. \"Weak economic data in Germany have contributed to the decline in economic expectations,\" ZEW chief Wolfgang Franz explained in a statement. \"Falling retail sales and industrial orders are confirming experts\' fears that the smouldering debt crisis is causing German companies and consumers to postpone their investment and spending plans,\" Franz said. A sub-index, measuring experts\' assessments of the current economic situation, fell for the third month in a row, shedding 5.2 points, but remained firmly in positive territory with a reading of plus 38.4 points. The renewed decline in the ZEW nevertheless added to the already negative sentiment on the financial markets, where both European stocks and the euro tumbled after Moody\'s warned that it could downgrade the credit rating for France, the eurozone\'s number-two economy. The ZEW index is the only barometer of investor confidence in Germany and this month\'s reading was based on responses from 271 analysts. It is frequently criticised for being volatile and an unreliable indicator for forecasting future economic trends. Other business confidence indices, such as the purchasing managers\' index or the all-important Ifo survey, which is based on as many as 7,000 responses in the real economy, are seen as more accurate forecasters. Commerzbank economist Ralph Solveen said the Ifo business climate index, scheduled for release on Friday, was \"more important.\" It would provide an insight as to \"how businesses view the current situation and whether order intake has weakened further recently. We expect business expectations especially to drop further and therefore follow the ZEW downwards,\" Solveen said. For Christian Schulz, senior economist at Berenberg Bank, the persistent deterioration in the ZEW index was \"consistent with a recession in Germany and in the eurozone in the fourth quarter of 2011 and the first quarter of 2012. \"Unless a solution to the crisis is found, confidence is unlikely to return quickly and the recession may become deeper and more protracted,\" Schulz said. Ben May, European economist at Capital Economics in London, saw the latest drop in the ZEW as \"further evidence that Germany is being hit hard by deteriorating export prospects and the eurozone debt crisis.\" The survey \"has never been a great predictor of the severity of economic downturns or the strength of upturns, but on the face of it the index is broadly consistent with annual gross domestic product (GDP) growth dropping from 2.7 percent in the second quarter to about minus 1.0 percent,\" May said. By contrast, Heinrich Bayer at Postbank Research believed that \"the current dip in growth need not necessarily lead to a recession. Recent months in particular have shown that sentiment is worse than the actual situation,\" he said.