UPDATE 1-German trade surplus narrows on weak export rise
(Adds details, economist comment)
BERLIN, Dec 10 (Reuters) - Germany's trade surplus narrowed in October to its lowest level in over half a year as exports posted meagre growth in the face of weakening demand from the country's recession-hit European partners.
The figures provided further evidence that Europe's largest economy will contract in the fourth quarter of the year amid a slowdown in exports, long a driver of German growth.
Imports rose 2.5 percent in October, far stronger than the 0.3 percent increase in exports, which followed a 2.4 percent decline in September, data from the Federal Statistics Office showed.
"The outlook may now be slowly improving with positive signals for Chinese and American growth, but the euro zone recession is likely to continue to weigh on German exports," Christian Schulz of Berenberg Bank said in a research note. "A falling trade surplus may also weaken GDP growth in Q4 further."
Germany has been an engine of growth throughout the three-year euro crisis, but weakness elsewhere in the European Union, where it sells roughly 60 percent of its exported goods, is beginning to hurt.
Last week, Germany's central bank slashed its growth outlook for next year, forecasting a meagre expansion of 0.4 percent compared to 1.6 percent previously.
"Given the difficult economic situation in some euro-area countries and widespread uncertainty, economic growth will be lower than previously assumed," the Bundesbank said on Friday.
Exports were still stronger in October than many economists had expected. In a Reuters poll they had forecast a 0.5 percent decline, while imports had been expected to push up by a more modest 0.3 percent.
The seasonally-adjusted trade surplus shrank to 15.2 billion euros from 16.9 billion in September. It was the lowest level since March, and well below a consensus forecast for it to narrow to 16.1 billion euros.
Unadjusted data showed German exports to euro zone countries declined 1.2 percent in the January-October period, compared to the prior year.
(Writing by Noah Barkin)