German exports to Russia and Japan were particularly `weak' as they decreased by 27 per cent and 12 per cent respectively during the third quarter, the German federal statistics office said in a report. The report said that German export growth is slowing basically due to a decrease in demand within Europe, which buys 56 per cent of German goods. Annual export growth to Europe slowed to 5.1 per cent in the third quarter from 13.3 per cent in the first half of 1998.

This bodes poorly for growth prospects of the newly formed 11-nation euro-currency zone since Germany accounts for some34 per cent of euro-zone gross domestic product (GDP), the report added. The data is seen by analysts to provide further evidence that German economic growth will decline in 1999 to 1.7 per cent from around 2.7 per cent in 1998.

Exports have always played a critical role in Germany's economic recovery, which had only recently showed signs of domestic-based growth. France was Germany's biggest trading partner in the third quarter, accounting for 11 per cent of imports, the report said. According to an analyst, German exports are firmly in the grip of recession plaguing the economies of Asia, Russia and Latin America. Experts have warned that Bonn's weak export growth does not stem only from outside its borders and that the nations government and labour unions will carry the brunt of the blame for lower investment and lower economic growth rates as well.

"Companies aren't investing enough because of uncertain expectations thanks to excessive wage demands from the unions and a largely unsuccessful taxreform," Helmut Hax, Chairman of the government's council for economic advisers, said.