The Collaborative International Dictionary of English v.0.48:

demoralizing \demoralizing\ adj.
   1. discouraging. Opposite of encouraging.

   Syn: demoralising, disheartening, dispiriting.
        [WordNet 1.5 +PJC]

The Collaborative International Dictionary of English v.0.48:

Demoralize \De*mor"al*ize\, v. t. [imp. & p. p. Demoralized;
   p. pr. & vb. n. Demoralizing.] [F. d['e]moraliser; pref.
   d['e]- (L. dis- or de) + moraliser. See Moralize.]
   To corrupt or undermine in morals; to destroy or lessen the
   effect of moral principles on; to render corrupt or
   untrustworthy in morals, in discipline, in courage, spirit,
   etc.; to weaken in spirit or efficiency.
   [1913 Webster]

         The demoralizing example of profligate power and
         prosperous crime.                        --Walsh.
   [1913 Webster]

         The vices of the nobility had demoralized the army.
                                                  --Bancroft.
   [1913 Webster]

WordNet (r) 3.0 (2006):

demoralizing
    adj 1: destructive of morale and self-reliance [syn:
           demoralizing, demoralising, disheartening,
           dispiriting]