German export surge ignites hope

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German exports rose 7% in June, the fastest pace in nearly three years, in the latest sign of recovery in Europe's biggest economy, official figures show.

Exports totalled 67.4bn euros (£57.8bn; $96.8bn), which, with imports at 56.4bn euros, brought the country's trade surplus to 11bn euros.

These figures are the latest positive signal from the export-focused economy.

At the same time, France reported that its trade deficit widened to 4bn euros in June, from 3.137bn euros in May.

For its part, the Organisation for Economic Co-operation and Development said that there were strong signals of improvement in the economic outlook of OECD economies.

Hope springs

The German economy contracted by 3.8% in the first quarter as exports plunged.

I fear this is a one off effect Ulrike Kastens, Sal Oppenheimer

The rise in exports renews hopes of recovery and follows comments on Thursday by Karl-Theodor Guttenberg, the economy minister, that the economy held steady in the second quarter.

Analysts welcomed the data. "That's a strong signal from exports after the disappointments we've seen previously," said Juergen Michels at Citigroup. "This means the German economy likely stabilised in the second quarter."

Other voiced cautious optimism.

"I fear this is a one-off effect," said Ulrike Kastens at Sal Oppenheimer. "The intensity of the recession is fading, the worst is behind us in the first quarter. But things remain very bumpy and uncertain."

French disappointment

In contrast, the French trade deficit was sharply higher than the 3bn euros forecast by analysts.

Deliveries of Airbus, one of France's most prominent exports, remained stable, but overall exports fell to 27.44bn euros in June from 27.908bn euros in May.

Imports rose to 31.449bn euros in June, against 31.045bn in May.

"Exports have fallen back to a historically low level, a sign that improvement in the world economy is struggling to take hold," said Alberto Balboni, an economist at Xerfi.

"It's likely that the trade deficit will grow further for the full year. For once though, that would be quite a good thing for the French economy, in the sense that it would result from resilient household demand."