* Third consecutive monthly rise in exports
* Import drop more than twice as large as export rise
* Trade component to strengthen GDP in Q4
(Recasts, adds background, economist comment)
By Brian Rohan
BERLIN, Jan 8 (Reuters) - German exports rose for the third month running in November, giving a boost to economic growth in the fourth quarter, but a drop in imports underlined weakening domestic demand in Europe's largest economy.
Exports rose by 1.6 percent on the month, preliminary Federal Statistics Office figures showed on Friday, outpacing the consensus forecast for an 0.5-percent increase.
Adjusted for seasonal swings, exports were 17.2 billion euros ($24.7 billion) higher than imports, making the trade surplus the highest since June 2008. But the main contributor to the surplus was a 5.9-percent drop in imports.
"Over the short term the decline in imports is a good thing," said Sebastian Wanke from Dekabank.
"However, there are a lot of intermediate goods among the imports, which are an indication of future production and the strength of private consumption," he added. "In view of this, we need to be somewhat wary of these figures."
Retail sales fell unexpectedly in November, data showed on Thursday, anchoring expectations for an annual decline in the sector for 2009 and dimming the outlook for the months ahead.
Looking forward, manufacturing orders figures for Germany showed growth in foreign demand is not guaranteed.
Orders data released on Thursday showed foreign demand declined in November, suggesting the momentum of the economic recovery may ease this year.
OLD FRIEND
But for the final months of 2009, Germany could count on its key export sector to drive the country's economic recovery.
"Net exports should ensure another strong GDP growth reading in the fourth quarter," said Carsten Brzeski, from ING Financial Markets. "It is good to know that the German economy can at least rely on a good old friend."
Germany pulled out of its deepest post-war recession in the second quarter of 2009, when the economy grew by 0.4 percent, and the expansion gained pace over the following three months, posting a 0.7-percent increase on the quarter.
The government has forecast the economy to grow by 1.2 percent this year, though Finance Minister Wolfgang Schaeuble last month described the projection as "very cautious".
Economists had forecast imports to grow 1.2 percent to put the November trade surplus at 12.4 billion euros.
The higher-than-expected export figures highlighted global demand for products from Germany, which has been the world's biggest exporter of goods since 2003 although China may have overtaken it in 2009.
MODERATE GROWTH
Other recent data has brought positive news for some branches of German industry.
A survey of manufacturers released on Monday showed output and new order growth helped German manufacturing activity expand in December at its fastest pace since May 2008.
The Ifo think tank's gauge of sentiment rose to its highest level in 17 months in December, buoyed by expectations companies can profit from an upturn in the global business cycle.
Volkswagen AG said on Thursday it sold 36.7 percent more cars in mainland China and Hong Kong in 2009 than the previous year as Beijing's policy initiatives bolstered automobile demand in the world's largest auto market.
But with economic stimulus programmes enacted by governments around the world set to wane in 2010, hopes for a stable, self-supporting recovery in Germany remain subject to risks.
"Export demand is set to show more moderate growth rates than at the beginning of the current recovery, not least as fiscal stimulus is increasingly phasing out and the global inventory cycle loses steam," said Alexander Koch from Unicredit. (Additional reporting by Dave Graham; editing by Stephen Nisbet)