FRANKPURT: Fears that an uncertain recovery in Europe’s biggest economy could stall were stoked today when data showed German industrial production suffered a sharp setback in December.

Output fell by 2.6 per cent from the previous month, seasonally corrected figures provided by the ministry showed, after gaining 0.7 per cent in November. On an annual basis, the fall was an even larger 7.1 per cent.

Analysts polled by Dow Jones Newswires had expected a monthly increase of 0.5 per cent but instead, Germany suffered its sharpest drop since February 2009, when the economy was in the mired deep in its worst recession since World War II.

Heavy slumps were reported in both the manufacturing and construction sectors, the economy ministry said in a statement. In general, industrial production lost momentum towards the end of 2009, a ministry statement said, while forecasting a downward trend in the sector in light of the orders data.