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UPDATE 1-German February trade surplus narrows unexpectedly

Published 04/08/2011, 02:28 AM
Updated 04/08/2011, 02:32 AM

* Surplus falls unexpectedly to 11.4 bln euros from 11.8 bln

* Both exports and imports rise more than expected (Adds details, background)

BERLIN, April 8 (Reuters) - A surprise surge in imports outpaced rising German exports in February and cut into the trade surplus, in a sign of robust demand from Europe's largest economy.

Germany's trade surplus narrowed to 11.4 billion euros, its lowest level since January 2010 as imports rose over four times more than expected, the adjusted data from the federal statistics office showed on Friday.

Economists in a Reuters poll had expected the surplus to rise to 12.5 billion euros, while imports, which grew 3.7 percent, had been seen rising only 0.8 percent.

"This should silence the pessimists a little," said Ulrike Rondorf from Commerzbank, refering to the export rise. "The momentum however, has decreased if you compare it with the first quarters after the slump."

Germany has recovered faster than expected from its deepest recession since World War Two, and recent indicators show it is on a steady path of growth despite a debt crisis affecting some fellow euro zone member states.

The stability provided by Europe's largest economy is underpinning an overall upturn for the continent, and data increasingly shows it is powering ahead.

Industrial orders and production data for February released this week came in several times above forecasts, while unemployment fell sharply in March to its lowest level in two decades while more generous wage settlements leave workers more inclined to spend.

The data has led to upward revisions of economic forecasts. On Thursday, a twice-yearly estimate from Germany's eight top economic research institutes showed they now expect 2.8 percent growth in 2011, a significant step above the government's current forecast of 2.3 percent.

The trade data also showed exports rose 2.7 percent, as opposed to the consensus forecast for 1.5 percent growth.

(For a table please double click on [ID:nLDE60H1WC] (Reporting by Brian Rohan and Annika Breidthardt; Editing by Kim Coghill)

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