German central bank predicts economy to contract 0.8% in 2009

BERLIN, Dec. 5 (Xinhua) -- The German economy will contract 0.8 percent in 2009 as the economic crisis begins to affect more and more sectors in Europe's largest economy, the German central bank predicted on Friday.

"The outlook for the German economy has shown a marked deterioration since the beginning of the fourth quarter. A considerable decline in real economic activity may be expected for the winter half-year of 2008-2009," said the Frankfurt-based Bundesbank in its semi-annual macroeconomic projections published Friday.

The German economy officially slid into recession in the third quarter as exports suffered badly from the global economic downturn. The Bundesbank forecast that overall output is likely to decline in the final quarter of the year too and "The German economy will therefore be going into next year from an already depressed level and with considerable existing strains in terms of general sentiment."

Overall, German exports of goods and services could decline by 0.5 percent next year compared with growth of 4.5 percent in 2008,the bank said. Private consumption meanwhile is projected to stagnate in 2009 after shrinking 0.5 percent this year.

According to the Bundesbank, the German economy is not expected to pick up again until the projected global economic upturn in 2010 which it said is still "fraught with major uncertainty." At the moment, the Bundesbank predicted Germany's GDP to go up by 1.2percent in 2010.