Exports fell sharply in June, ending a period of sustained growth that has been in evidence since the beginning of 2002.

Initial figures compiled by the Central Statistics Office (CSO) suggest that, when adjusted for seasonal factors, Irish exports fell to €6.9 billion, down from €8.9 billion in May.

Imports were also weaker at €4.4 billion, a drop of €659 million.

This resulted in a trade surplus of €2.5 billion in June compared with €3.8 billion in May.

The recorded slowdown cast doubts over the ability of the export sector to underpin economic growth this year and follows last week's cut by the Department of Finance of its growth forecast's for the Irish economy.

The Department reduced its forecasts for gross national product (GNP) growth for 2002 from 3.5 per cent to 3 per cent.

Some economists argued that the Department of Finance was being overly cautious, pointing to the strong growth in Irish exports in the first five months of 2002 as having the capacity to underpin stronger GNP growth, possibly of more than 5 per cent.

The latest figures, however, point to a marked downturn in June.

Comparing export performance during the January to May 2002 period with the same period last year, the CSO has stated that exports rose by 9 per cent to €41 billion.

Exports of medical and pharmaceutical products achieved the strongest growth rate, increasing by 90 per cent to €5.8 billion, while exports of organic chemicals were up 19 per cent to €8.6 billion. Exports of telecommunications and sound equipment decreased to €1.5 billion, down 14 per cent.

Increases in exports were recorded for Belgium, Britain and Switzerland. Irish exports to Germany fell significantly, with the CSO recording a 42 per cent decline, with decreases also noted in the Netherlands, France and the Philippines.

Imports rose by 2 per cent in May. The largest increase was in imports of organic chemicals, which were up by 55 per cent, while imports of electrical machinery increased by 15 per cent.

Imports of telecommunications equipment decreased by 21 per cent during the month, according to the CSO.

Imports from Britain were up 24 per cent, with imports from Finland more than doubling. Decreases in imports from France, Japan, Singapore and Malaysia were recorded by the CSO.

The CSO has also reported a 2.5 per cent increase in industrial turnover in transportable goods industries in June when compared with the same month last year.

Over the three months between April and June 2002, which gives a view of the underlying trend, the CSO recorded a 3.9 per cent decrease.

According to official data, increases of 2.2 per cent and 8.4 per cent were recorded for intermediate products and consumer goods respectively. A decrease of 21 per cent was recorded for capital goods.

The sharpest increase was in pharmaceuticals, medicinal chemicals and botanical products, where turnover rose by 48.5 per cent. The sharpest decline was in radio, television and communication equipment and apparatus, where turnover fell by 38 per cent.