Saturday January 17, 7:59 am ET
Germany went into recession in last year's third quarter and economists have predicted it will shrink in 2009. The government is due to issue its latest official forecast on Wednesday.
"Economic output is likely to decline by 2 to 2 1/2 percent this year," Economy Minister Michael Glos was quoted as saying in an interview with Welt am Sonntag, which the newspaper released ahead of publication Sunday.
The government last updated its 2009 growth forecast in mid-October, when it predicted growth of 0.2 percent this year -- cutting a percentage point off its previous outlook.
The situation has worsened since then, with official data showing a sharp decline in exports in November. Exports have been a key driver of German growth over recent years.
The Federal Statistical Office has estimated that the economy may have shrunk by as much as 2 percent in the fourth quarter of 2008. It said Germany's annual growth last year was 1.3 percent, only about half the previous year's level.
Chancellor Angela Merkel's governing coalition this week agreed on a new euro50 billion ($66 billion) economic stimulus plan that includes investments in infrastructure, as well as tax relief and bonuses for families with children.
It comes on top of an earlier plan worth euro23 billion, which was criticized at home and abroad as too cautious.
"As a result of the government's fast and determined action, people can be confident that Germany will, in the end, emerge strengthened from this crisis," Glos told Welt am Sonntag.
source: yahoo finance