FRANKFURT, Feb 9: Germany, a powerhouse in the world economy, said on Monday that its key export sector flagged in December when imports surged in a sign its recession may have deepened at the end of last year.

The export data seamlessly fit into the series of recent ugly industrial figures, commented UniCredit Group analyst Alexander Koch.

An export slowdown is especially bad news for Germany because exports are its main engine of growth, and the data showed that they were still losing steam at the end of the year.

With French economic activitiy set to contract in early 2009 amid a record French trade deficit, the eurozone’s two biggest economies are both struggling to cope with the global economic downturn.

Germany said its 2008 trade surplus fell sharply, amid weak global demand for automobiles and machine tools.

The surplus usually posted by Germany, the biggest European economy, shed 8.7 per cent from the level in 2007 to 178.2 billion euros ($226.8 billion).

Total exports increased by 2.8 per cent, while imports gained 5.8 per cent, the Destatis statistics service said.

The trade surplus in December came to 6.9 billion euros, down from 9.9 billion in December 2007, Destatis said.

The one-month drop came on the heels of a 10.8 per cent collapse in November.

A key German export, automobiles, has been slammed by a slump in global markets, but sales of machine tools and other capital goods used to make finished products have fallen as well.

Germany has been hit harder than most other important export countries,Koch said.

Figures provided by the German central bank showed that Germany’s current account, the broadest measure of trade with other countries, posted a surplus of 162.5 billion euros last year, down from 180.8 billion in 2007.

And while the value of German merchandise exports in dollar terms exceeded that of Chinese companies for 2008 as a whole, Germany’s sixth annual title in a row” would likely be its last, Koch said.—AFP