German manufacturers are hoping for renewed export demand

The jobless total fell by 1,000 to 4.4 million in June, leaving the adjusted unemployment rate unchanged at 10.5%.

"The economic recovery is still not strong enough for firms to hire more employees," the Federal Labour Agency said in a statement.

The jobless data came as the IMF revised up its estimate for German economic growth this year to 1.8%.

And it said growth would reach 2% in 2005. The IMF said improved competitiveness and exports responding well to increased world demand were the key factors behind the growth upgrade.

Berlin-based DIW - one of the country's leading economic institutes - also upgraded its forecast for German growth, to 1.8% for 2004 and 2.1% for 2005.

Its previous estimate was for 1.4% growth both this year and next.

"The economy has put its period of stagnation behind it and has noticeably gained impetus since the start of this year," DIW said.

"Exports have become the motor of the upswing, driven by the global economic recovery."