German industrial orders rose more than forecast in July due to a solid increase in domestic contracts, Economy Ministry data showed on Thursday, boosting hopes that domestic demand will prop up Europe's largest economy during the euro zone crisis.

Seasonally and price-adjusted order intake climbed by 0.5 percent on the month, coming in above the mid-range forecast in a Reuters poll of 41 economists for contracts to increase by 0.2 percent on the month.

Domestic bookings rose by 1.0 percent and foreign orders edged up by 0.1 percent despite a 0.6 percent drop in euro zone orders.

The Economy Ministry said order levels remained stable overall and added that seasonally adjusted, the volume of big orders in July was exactly the same as the average level for the first half of the year despite the hesitant mood at the moment.

"Orders from abroad have developed a bit more positively than domestic orders in recent months. Orders from the euro zone seem to have stabilized," the ministry said in a statement.

The data for June was revised upwards to a drop of 1.6 percent from a fall of 1.7 percent.

(Reporting by Michelle Martin)