* Orders fall by 0.2 percent on the month
* Drop compares with Reuters poll for 0.4-percent fall
* Foreign orders rise, domestic orders fall (Adds sectoral breakdown of data, analyst quotes)
BERLIN, July 6 (Reuters) - German industrial orders fell less than forecast in May as a modest rise in foreign demand took the sting out of a decline in domestic bookings, the Economy Ministry reported on Monday.
Orders for goods made in Germany decreased by 0.2 percent on the month, the data showed. That was better than a Reuters consensus forecast for a 0.4-percent drop.
Foreign demand inched up 0.2 percent while domestic demand dropped by 0.6 percent. A sectoral breakdown of the data showed demand for intermediate goods jumped by 1.3 percent while orders for capital goods dropped by 0.8 percent and bookings for consumer goods declined by 1.2 percent.
The April data was revised up sharply to an increase of 2.2 percent from an originally reported 1.4 percent rise. That was the strongest increase since December.
Combined for April and May, bookings jumped by 2.7 percent compared to the two previous months.
"Industrial orders in the spring are pointing sharply upwards," the ministry said, adding that demand from abroad was strong.
"Economic activity of the manufacturing sector in Germany is picking up slightly," it said.
German economic growth slowed to 0.3 percent in the first quarter, but many economists expect it to grow faster in the April-June period.
Economist Stefan Kipar from BayernLB said the outlook for the coming months was looking good. "But we'll have to wait and see how the factor Greece will bite," he added.
Greeks overwhelmingly rejected conditions of a rescue package from creditors on Sunday, throwing the future of the country's euro zone membership into further doubt and deepening a standoff with lenders. (Reporting by Michael Nienaber; Editing by Noah Barkin and Andrew Heavens)