The German government is forecasting Europe’s largest economy to shrink by 2.25 percent this year.
“With that, the Federal Republic of Germany will go through one of the worst recessions in its existence,” Finance Ministry official Jörg Asmussen said in the report, adding that the country’s economy had performed far worse than expected in the fourth quarter of 2008.
“Based on the leading indicators we expect the gross domestic product (GDP) will decline in the first quarter of 2009,” Asmussen said.
Meanwhile the ministry said that the export sector would remain bleak as demand for goods from Germany slumps in the face of the ongoing global economic crisis.
As the economy shrinks, the country’s job market will also suffer as businesses lay off more workers to reduce their output, the ministry report concluded.