(MENAFN- AFP) The German economic engine, one of the key drivers of recovery in the 17-country eurozone, appears to be stalling, with industrial output declining and exports nearly grinding to a halt, data showed on Monday.
But most analysts believed that the current weak spell would prove short-lived and that recovery would regain momentum in coming months.
Amid repeated criticism that Germany is not doing enough to help pull its eurozone partners out of the economic doldrums, new trade data on Monday showed that German imports from the single currency area grew by 3.4 percent in October, while its exports to that region slipped by 0.1 percent.
Germany has come under increasing fire for its persistently high trade surplus recently, with critics arguing that its economic robustness came at the expense of the eurozone's weaker members.
But overall, the German trade surplus contracted in October, as imports grew faster than exports, the federal statistics office Destatis calculated.
In seasonally adjusted terms, Germany exported goods worth 92.9 billion euros ($127 billion) in October, up only fractionally from 92.7 billion euros in September, Destatis said in a statement.
Imports, on the other hand, rose by a much stronger 2.8 percent to 76.1 billion euros from 74.0 billion euros.
That meant the seasonally adjusted trade surplus -- the balance between imports and exports -- declined to 16.8 billion euros in October from 18.7 billion euros in September.
In view of the criticism, the European Commission in Brussels has said it will take a closer look at Germany's current account surpluses.
But Natixis economist Johannes Gareis said the October data would "ease the pressure on the German locomotive to do more to help rebalancing the eurozone."
At the same time, industrial output shrank by 1.2 percent in October after already declining by 0.7 percent in September, the economy ministry calculated in preliminary data.
That suggests "that the country's main growth engine has not only stalled, but gone into reverse," said Capital Economics economist Jonathan Loynes.
"Barring some hefty monthly rises in November and December, industrial production is now likely to contract in the fourth quarter," Loynes believed.
Together with the trade figures, the latest economic data for Germany suggested that "even the super-competitive German export sector is struggling to expand against a background of weak overseas demand and a strong euro exchange rate," Loynes said.
"Overall, the numbers put another dent in hopes that Germany will drive a further recovery in the eurozone as a whole and maintain the pressure on the European Central Bank to do more to boost growth across the currency union," he concluded.
But Berenberg Bank economist Christian Schulz was more optimistic.
The weakness in industrial output "should soon be reversed," he said.
"In November, survey indicators rebounded sharply as tax hikes did not materialise, suggesting that the softness was temporary and that Germany is headed for trend output growth rates in the fourth quarter."
BayernLB economist Stefan Kipar was similarly confident that despite the weak October data, "survey indicators suggest that companies are gradually becoming more confident about recovery.
"We're expecting an upturn in the economy at the end of the year, even if it won't be a unusually strong one," he said.
Natixis economist Gareis said he too expected the weak phase in the German industrial sector to be over.
But "Germany's growth prospects cannot defy the laws of gravity. All in all, we expect Germany's GDP growth to stabilize at 0.3 percent in the last quarter of this year," he said.
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