German exports missed forecasts in June and imports surprisingly fell, suggesting sales of goods and services abroad may drag on growth in the second quarter, although other data have pointed to a pickup. Exports, the traditional engine of the German economy, rose by 0.6 percent on a seasonally-adjusted basis in June, the Federal Statistics Office said on Thursday. That was below forecasts for a 1 percent increase and suggested shipments abroad were largely stagnant in the second quarter. Import data was worse than expected. Purchases of foreign goods fell 0.8 percent from May, well short of the consensus estimate in a Reuters poll for a 0.5 percent increase and undershooting even the lowest estimate, of a 0.5 percent drop. That raises doubts about the strength of domestic demand, which the government hopes will buoy growth as the euro zone struggles and alternative markets like China weaken. German exports had seen their sharpest monthly drop since late 2009 in May. Europe's biggest economy only narrowly escaped a recession in the first quarter after a robust performance during the early years of the euro zone crisis. Strong industrial orders and output data released earlier this week suggest exports may strengthen in the second half, however, and could help offset the disappointing trade figures. "Exports were a bit of a drag on overall economic growth, but exports are likely to rise more strongly in the second half of the year because euro zone countries such as Italy and Spain will have stabilised," said UniCredit economist Alexander Koch. "The slower export growth was quite likely more than compensated for by the strong manufacturing output in the second quarter, robust consumption and the springtime pick up in construction. We're expecting GDP growth of 0.6 percent." An unadjusted breakdown showed exports to the euro zone, where Germany sends 40 percent of its goods, were down 1.4 percent in June compared with the same month last year, although exports to non-euro zone members of the EU were up 2.2 percent. Shipments to countries outside the European Union were down 4.6 percent as emerging economies like China slow, which economists warn could hit Germany hard. There are other grounds for caution too - a purchasing managers' survey published last week showed manufacturers' bookings from abroad fell for a fifth consecutive month in July due to weak appetite from clients in China and the euro zone. Big industrial firms have also been relatively downbeat in the current earnings season. Lanxess felt the pinch from slower Chinese growth and others like steelmaker Salzgitter complained of weak demand in austerity-hit Europe. "The traditional driver of German growth still has problems to return to full speed," ING senior economist Carsten Brzeski said. Disappointing With exports likely to weigh on growth this year, the government is banking on private consumption, the economy's saving grace in the first quarter but which now looks shaky. Retail sales fell by their largest amount this year in June. The decline in imports will also dampen hopes among struggling euro zone states that they will be able to offload more of their goods to Germany and export their way out of the crisis. An unadjusted breakdown showed imports from the currency bloc decreased by 0.5 percent on the year in June. The seasonally-adjusted trade surplus widened to 15.7 billion euros from an upwardly revised 14.6 billion in May. That should help boost second-quarter gross domestic product, for which preliminary figures are due next week. Other positive signs for GDP, which most economists see picking up in the second quarter after just 0.1 percent growth in Q1, include surveys showing the private sector expanding, business and consumer morale brightening and lower unemployment. The German economy is still outperforming its crisis-stricken euro zone peers like Italy, where data this week showed the economy had contracted for eight consecutive quarters, and Spain, where retail sales have slumped for the last three years. (Reuters)