German industrial output fell far more than expected in August and posted its biggest drop since the financial crisis in early 2009, Economy Ministry data showed today.

The latest figures will raise question marks about Europe's largest economy. 

The 4% month-on-month drop missed the consensus forecast in a Reuters poll for a 1.5% decrease and came short even of the lowest forecast for a 3% fall.

It was the biggest drop since a 6.9% fall in January 2009. 

Germany's economy had a strong start to the year but shrank by 0.2% in the second quarter. Evidence is mounting that it barely grew in the third quarter and some economists even forecast it may have contracted again. 

"Industrial production is currently going through a weak phase but the current decline is exacerbated by holiday effects," the ministry said in a statement. 

"All in all, one should expect weak production for the third quarter as a whole," it added. 

With the euro zone flirting with deflation and growth for the currency bloc still subdued, hopes have rested on Germany to boost spending and drive growth.

Weak investment, which together with slow trade weighed on the economy in the second quarter, put a downer on production figures. Investment goods dropped by 8.8% month on month, as the car industry drove down its output by a quarter.

The output data for July was revised downwards to a 1.6% increase from a previously reported 1.9% rise.