German exports drop as southern Europe markets shrink

Truck crossing German border into Denmark
Image caption German trade - both imports and exports - saw their sharpest decline in six months

German exports fell 3.6% in October as demand from crisis-hit southern European markets shrank, data shows.

It was the biggest fall in six months, and much bigger than the 1% decline expected by markets.

German imports shrank by 1% versus a month earlier - also more than expected - suggesting demand is also weakening in Europe's biggest economy.

The country's trade surplus fell from 17.3bn to 11.6bn euros ($15.5bn; £9.9bn), or about 5.5% of its GDP.

"We are seeing the beginning of a strong hit to German exports," said Holger Schmiedling, economist at Berenberg Bank.

"It is telling that the exports fell by more than the imports. It's the euro crisis. If our neighbours aren't doing well, Germany can't remain an island of tranquillity."

Meanwhile, German inflation fell marginally in November to 2.4% versus a year earlier, compared with a 2.5% rate the month before.

In France, industrial output and manufacturing production both registered zero growth in October versus the previous month - slightly beating expectations of a mild contraction.