Berlin  - German exports rose by a seasonally-adjusted 7 per cent in June compared to the previous month, the country's statistics office said Friday.

The increase follows a more modest 0.3 per-cent rise in German exports in May, with the increase over the last two months adding to signs that the global recession is starting to loosen its grip on Europe's biggest economy.

In June, exports were 22.3 per cent lower than the previous year's figures, compared to a year-on-year drop of 24.6 per cent in May.

The balance of trade was 12.2 billion euros (17.5 billion dollars) for the month of June. This compares to 20.1 billion dollars in June 2008.

Many economists believe that as the world's leading export nation, Germany could enjoy a rather speedy recovery from the slump on the back of a sustained upswing in global trade.

Key forward-looking economic sentiment indicators have already pointed to the slowdown in the German economy starting to bottom out with business confidence in the nation rising for the fourth consecutive month in July.

Also on Friday, Germany's Ministry of Economics and Technology is forecast to say that German industrial production posted a 0.4 per cent increase in June after rising by 3.7 per cent in May.

Underscoring the optimism about the outlook for the nation's economy, the economics ministry said Thursday that key German factory orders surged in June by 4.5 per cent to record their fourth monthly gain. Economists had, however, predicted only a 0.7 per cent rise.

The sharp rise in June factory orders came in the wake of a 4.3- per-cent increase in May.

Driving the rise in June was a solid 8.3-per-cent jump in total foreign industrial orders, in particular from Germany's partners in the 16-member eurozone.

Industrial orders from the eurozone soared by 13.2 per cent in June, the economics ministry said.

But underscoring the fragile state of the German economy, total domestic orders edged up by just 0.2 per cent in June.

Moreover, after a sharp contraction in economic growth in the first three months of the year as the global recession took hold, analysts expect the German economy to shrink by a dramatic 6 per cent plus this year. (dpa)