The ZEW Center for European Economic Research released its economic sentiment index for Germany and the Eurozone on Tuesday. Germany's ZEW economic sentiment index dropped to 1.9 in October from 12.1 in September, missing expectations for a fall to 6.0.

The assessment of the current situation in Germany fell by 12.3 points to 55.2 points in October.

"The exhaust gas scandal of Volkswagen and the weak growth of emerging markets has dampened economic outlook for Germany. However, the performance of the domestic economy is still good and the Euro area economy continues to recover. This makes it rather unlikely that the German economy will slide into recession," the ZEW President Clemens Fuest.

Eurozone's ZEW economic sentiment index decreased to 30.1 in October from 33.3 in September.

The assessment of the current situation in the Eurozone declined by 1.5 points to -11.2 points in October.