BERLIN — German industrial production grew by a smaller-than-expected 0.3 per cent in June, official data showed Thursday — the second set of disappointing figures this week from Europes biggest economy.

The increase reported by the Federal Statistical Office was short of economists forecast of a 1.2 per cent rise compared with the previous month. In May, production dropped by 1.7 per cent.

Overall production in the second quarter was down 1.5 per cent compared with the first quarter. The Economy Ministry pointed to a strong first quarter in which a mild winter led to a rebound in construction activity.

Germany is due to release second-quarter gross domestic product figures on Aug. 14. They are widely expected to show a relatively weak performance after the economy grew a robust 0.8 per cent in the first quarter.

On Wednesday, official figures showed that factory orders dropped 3.2 per cent in June compared with the previous month. The monthly data are often volatile, but that was the worst performance in nearly three years. It also fell far short of economists predictions of a 0.9 per cent increase.

The Economy Ministry cited a low number of bulk orders but also said that geopolitical developments and risks were a likely factor in that drop. Tension has been mounting between the West and Russia over the crisis in Ukraine, with the European unio and United States imposing economic sanctions on Russia last week.

UniCredit economist Andreas Rees said the missing rebound is hard to explain in industrial production, but disputed the idea that the Ukraine conflict dampened either production or orders in the second quarter.

However, and clearly, geopolitical tensions and their effects on the business cycle have become million-euro questions for the second half, Rees said in a research note.