* German exports rise 3.0 pct in April, imports up 0.1 pct
* Industrial output climbs smaller than expected 0.2 pct
* German economy expected to slow in Q2
(Combines with Bundesbank forecasts)
By Michelle Martin and Noah Barkin
BERLIN, June 6 German exports rose at the
fastest pace in nearly two years in April while industrial
output inched up, and the Bundesbank raised its 2014 growth
forecast for Europe's largest economy.
Exports, traditionally a driver of the German economy,
struggled last year and fell in two of the first three months of
this year, putting a drag on overall growth.
But data from the Federal Statistics Office on Friday showed
shipments abroad rebounded 3.0 percent in seasonally adjusted
terms in April, their biggest increase since May 2012. That came
after a drop of 1.8 percent the previous month.
"The export data signals trade may provide impetus again in
the spring," said Stefan Kipar, an economist at BayernLB.
Industrial output edged up a smaller-than-expected 0.2
percent on the month as the spring rebound turned out weaker
than usual due to a mild winter. But it was still an improvement
compared with a downwardly revised drop of 0.6 percent in March.
Construction lagged although energy output increased.
Germany's economy is expected to grow slower in the second
quarter after expanding 0.8 percent in the first - its fastest
rate in three years - on the back of an unusually mild winter.
"The latest data gives no reason to doubt the underlying the
fundamental strength of the German economy. However, a slowing
of the economy in the second quarter is clearly in the offing,"
said Carsten Brzeski, an economist at ING.
He said the rise in exports could be due to earlier orders
and output, adding that two disappointing months in output could
point to a knock from the Ukraine crisis and Chinese slowdown
while the euro zone recovery may not be robust enough yet to
boost Germany's industrial sector.
Data on Thursday had shown industrial orders surging in
April, and the German economy ministry said well-filled order
books in manufacturing and construction, along with optimism
among firms, pointed to the upward trend in output continuing.
ROBUST GROWTH AHEAD
The Bundesbank hiked its 2014 growth forecast for Europe's
economic powerhouse by 0.2 percentage points to 1.9 percent
thanks to strong domestic demand and kept its 2015 estimate at
2.0 percent. It predicted a 1.8 percent expansion in 2016.
"Germany's strengthened domestic economy as well as the
ongoing improvement in the economic situation of the industrial
countries and the gradual recovery of the euro area suggests
that Germany will follow a robust growth path," Bundesbank
President Jens Weidmann said.
But he also warned that growth would be restricted in future
due to a tighter labour market caused by demographic change and
said that in view of this, it was not helpful for the German
government to press ahead with its plans to allow some people to
retire on a full pension at age 63.
A breakdown of year-on-year trade data showed demand from
European countries rising by 4.1 percent while exports to states
outside of Europe dropped by 5.7 percent.
The trade surplus widened to 17.7 billion euros, well above
a consensus forecast for 15.2 billion, as imports rose by just
0.1 percent. Economists polled by Reuters had expected exports
to climb by 1.5 percent and imports to increase by 0.6 percent.
Other recent data has been mixed, with the private sector
growing, unemployment increasing and yearly retail sales rising
while surveys have shown business and investor morale weakening.
(Reporting by Noah Barkin & Michelle Martin)