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Last Updated: Monday, 10 March 2008, 20:30 GMT
Demand for German exports strong
VW-emblems on a table in the Volkswagen factory in Wolfsburg
Germany is still the world's biggest exporter, with China second
German firms shrugged off a steep rise in the euro to report a surprise growth in the amount of goods sold abroad in January, official figures show.

German exports rose by 3.8%, in contrast to a 1.2% fall in December, widening the trade surplus to 16.1bn euros (12.3bn; $24.7bn).

The figures suggest German trade remains buoyant even as the euro makes exports outside the eurozone pricier.

But analysts warned that such growth rates were unlikely to continue.

German imports rose 4.2% in January compared to the previous month when imports rose 5.3%.

"Exports are looking extremely positive. After the mild weakness in December, we still cannot talk about a downwards trend," said Rainer Sartoris, an analyst at HSBC Trinkaus.

"It's questionable, however, whether these growth rates can be sustained for the rest of the year. The strong euro and the weakness of the US economy would suggest not," he added.

World leader

The dollar has been sliding sharply against the euro since last September as cracks in the US economy began to emerge, sparking a succession of aggressive interest rate cuts.

Last week the greenback hit an all-time high of $1.546 on fears that the Federal Reserve, the US central bank, will have to slice interest rates further to prevent the US from tipping into a recession.

There have already been some signs that companies are shifting production outside Germany to insulate their earnings from the strong euro, which is the currency their costs are priced in.

Carmaker BMW is in the process of shrinking its German workforce to accommodate expansion plans in the US.

But Germany retains its crown as the world's top exporter, selling almost one trillion euros ($1.5 trillion) worth of goods abroad in 2007, according to the Federal Statistics Office, compared with China's $1.22 trillion.

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