Germany's trade surplus narrowed in October to its lowest level in over half a year as exports posted meagre growth in the face of weakening demand from the country's recession-hit European partners.

The figures added to evidence that Europe's largest economy will contract in the fourth quarter of the year amid a slowdown in foreign sales, long a driver of German growth.

Imports rose 2.5 per cent in October, far stronger than a 0.3 per cent increase in exports that followed a 2.4 per cent decline in September, data from the Federal Statistics Office showed.

"The outlook may now be slowly improving with positive signals for Chinese and American growth, but the euro zone recession is likely to continue to weigh on German exports," Christian Schulz of Berenberg Bank said in a research note.

"A falling trade surplus may also weaken GDP growth in Q4 further."

Germany has been an engine of growth throughout the three-year euro crisis, but weakness elsewhere in the European Union, where it sells roughly 60 per cent of its exported goods, is starting to bite.

Last week, Germany's central bank slashed its growth outlook for next year, forecasting a meagre expansion of 0.4 per cent compared to 1.6 per cent previously.

The downbeat mood was echoed today in the euro zone's second largest economy. The Bank of France said it expected GDP to dip 0.1 per cent in the final quarter from the third, while industrial output unexpectedly shrank in October.

French gross domestic product grew 0.2 per cent in the third quarter, contrary to predictions that the economy would stagnate or even shrink, but economists said the outlook was gloomy.

In a separate report, national statistics office INSEE said industrial output dropped 0.7 per cent in October, the first month of the final quarter, following a 2.7 per cent drop in September.

The October figure was weaker than expected, as economists polled by Reuters had predicted a 0.3 per cent rise.

Reuters