German trade surplus widens

The German Federal Statistics Office said on Tuesday the trade surplus in 2002 was 126.1bn euros ($134.6bn; £83bn), up from 95.5bn euros the year before.

" Clearly we are drifting away from the forecasts "
Matti Vanhala, ECB council member

Imports declined by 3.8% as exports grew by 1.6%, presenting a mixed message for the German economy.

Declining imports suggests sluggish domestic demand from both manufacturers and consumers, while the rise in exports is a positive sign for Germany's battered industry.

But more recent data has shown that export growth is now slowing down, partly due to the rise of the euro which makes German products expensive abroad.

Missing forecasts?

Meanwhile, the European Central Bank (ECB) appears to be increasingly gloomy about growth forecasts in the eurozone.

A Finnish council member of the ECB said on Tuesday signs of a new recession in Germany could lead to a reduction in the bank's growth forecasts.

Matti Vanhala, head of the Finnish central bank, told the Financial Times that things had changed since the ECB said the eurozone economies would grow between 1.1% and 2.1% this year.

"Clearly we are drifting away from the forecasts," Mr Vanhala said.

"The economy looks weaker... the indicators point to a deteriorating outlook...This is creating uncertainty about the numbers we saw in December."

Troubled times

The German trade figures were released a day after data showed German industrial output fell 2.6% in December, its worst decline in four years.

Although German exports for the year were strong, rising 1.6% to 648.4bn euros, the German statistics office said exports were sluggish at the end of the year.

Exports in December fell by a seasonally-adjusted 2.1% compared with November while imports fell 1.3%, the Federal Statistics Office said.

The drop in exports comes amid concerns that the stellar rise of the euro to around $1.07 is hurting German manufacturers.

Last week, industry orders for December fell by a much worse than expected 4.1%, largely due to a sharp drop in foreign orders.