German central bank predicts economy to contract 0.8% in 2009

Special Report:Global Financial Crisis

BERLIN, Dec. 5 (Chinese media) -- 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.