BERLIN (Reuters) - The mood among German investors improved less than expected in March, a survey showed on Tuesday, as uncertainty about the outcome of major European elections and their effect on the growth outlook for Europe's biggest economy remained high.

Mannheim-based ZEW said its monthly survey showed its economic sentiment index rose to 12.8 from 10.4 points in the previous month. This undershot the Reuters consensus forecast for rise to 13.1.

A separate gauge measuring investors' assessment of the economy's current conditions edged up to 77.3 points from 76.4 in February. This was also slightly weaker than the Reuters consensus forecast which predicted a reading of 78.0.

ZEW President Achim Wambach said the fact that sentiment only improved slightly reflected the current uncertainty surrounding the future economic development.


"With regard to the economic situation in Germany, no clear conclusions can be drawn from the most recent economic signals for January 2017," Wambach said.

German industrial output and exports rose more than expected in January, data showed last week, suggesting Europe's economic powerhouse started into 2017 on a solid footing despite the threat of rising protectionism.

The surprisingly strong figures gave some reassurance that Germany's economic upswing is likely to continue in 2017 after industrial orders in January posted their biggest monthly slump in eight years and retail sales also disappointed.

ZEW said investors' assessment of the current economic situation in Germany remained at a very high level compared to many previous years, but the research group also pointed to political risks clouding the outlook.

"The political risks resulting from upcoming elections in a number of EU countries are keeping uncertainty surrounding the German economy at a relatively high level," Wambach added.

Far-right parties are expected to make a strong showings in elections in the Netherlands on Wednesday and in France next month.

Geert Wilders, who wants to "de-Islamicise" the Netherlands, hopes clashes between Turkish-Dutch protesters and the police, along with Ankara's accusations of Dutch "fascism", will help bolster his chances of finishing first.

Wilders' Party for Freedom (PVV) has virtually no chance of forming a government, given the splintered political landscape. Other parties have ruled out a coalition with a party they view as racist, but a PVV win would nevertheless send shock waves across Europe.

(Reporting by Michael Nienaber; Editing by Joseph Nasr and Dominic Evans)

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