Exports to east Asia will fall a substantial one-fifth this year after already declining 13 per cent in the first half of 1998, the DIW said in its latest publication.

It added that lost exports to east Asia were unlikely to be compensated for by German exports to other regions.

The DIW said that slower economic growth in industrialised countries combined with the east Asian situation would have a negative impact on German exports.

The United Kingdom is relatively dependent on Asia and the DIW said this could have a stronger dampening effect on Germany because the UK is an important trade partner for Germany.

Declining German exports to east Asia are a result of the ever-deepening recession in the region and Germany's worsening exchange rate position in relation to Japan and the crisis-hit countries, the DIW said, adding that mostof the countries in the region had not yet reached the final turning-point.

The DIW also said that German exports to central and eastern Europe were slowing substantially this year.