German exports
Cars for export stand in a parking area at a shipping terminal in the harbour of the northern German town of Bremerhaven. (Reuters)

Germany's exports unexpectedly declined in July primarily due to lower orders from its fellow euro-area countries who are still suffering from the credit crisis.

After adjusting for working days and seasonal changes, July exports declined 1.1% from June when they rose 0.6%, according to Germany's Federal Statistics Office in Wiesbaden. Economists expected a 0.8% increase in exports for the month.

Meanwhile, imports rose 0.5% on month in July, compared to a 1% decline in June. Growth fell short of analysts' forecasts of 0.9%.

The foreign trade balance showed a surplus of €16.1bn ($21.1bn, £13.6bn) in July, down from a revised €17bn in June and €16.9bn in July 2012.

Export growth has been vital for the GDP of the largest economy in Europe, which recently came out of recession.

The weak export data comes after a 2.7% fall in factory orders in July from a month earlier, said the Economy Ministry.

Lower Exports to Eurozone

The eurozone is the biggest trading partner of Germany and the member countries buy almost a third of the country's exports. In July, German exports to the eurozone declined by 0.7% compared to the same month a year before.

Many countries in the single-currency area, who were hit by the sovereign debt crisis, are still struggling to recover amid high unemployment rates and low wage growth.

Exports to non-euro area countries in Europe rose 3.6%, while those to all other countries declined by 1%.

In contrast, imports from euro-area countries rose by 1.5% in July. Non-euro area imports declined by 1.7% and imports from all other countries rose by 1.6%.

Euro-Area Developments

Among other developments in the eurozone, France reported a trade deficit of €5.1bn in July, bigger than €4.5bn in June. Meanwhile, Italy's surplus from non-euro area trade increased to €2.8bn from €2.5bn.

The Greek economy contracted 3.8% on year in the second quarter, according to the latest official data. Portugal recorded a second-quarter GDP growth of 1.1% over the previous quarter.

In Spain, production at factories declined by 1.4% in July, the 23rd month of falling industrial production.

The euro area is widely expected to come out of its longest-ever recession in the ongoing fiscal year, amid positive data from the manufacturing and services sectors. The euro-area economy expanded 0.3% in the second quarter.

Meanwhile, the European Central Bank (ECB) on Thursday maintained its forecast for an economic contraction in 2013. The ECB expects the GDP to shrink by 0.4%, compared with its June outlook of 0.6%. For 2014, the central bank expects a growth in the range of 1% to 1.1%.

The ECB also kept its benchmark interest rate at a record low of 0.5%.