BERLIN, May 4 (Reuters) - The Sentix index measuring

investor morale in the euro zone improved slightly in May,

indicating that investors do not expect a further escalation of

the Iran conflict, but Germany bucked the trend with a further

decline.

* The index rose to -16.4 points from -19.2 the month

before, the survey showed on Monday, better than the forecast

decline to -21.0, according to analysts polled by Reuters.

* The index for the German economy, Europe's largest, bucked

the trend, falling to -30.9 from -27.7 in April.

* Germany "finds itself not only in a government crisis but

also in a distinct economic trajectory of its own," Sentix said.

* The survey of 984 investors taken from April 30 to May 2

showed improvement in both the euro zone's economic expectations

and the current situation in May.

* Expectations rose to -11.3 points from -15.5 the previous

month, while the index measuring the current situation rose to

-21.5 from April's -22.8.

* "However, both indices remain in negative territory,

meaning the risk of recession remains acute," Sentix said.

* The inflation barometer was only slightly above the annual

low recorded last month at -42.75 in May.