German think tank warns economy may have shrunk by 9.8%

Agency News

The German economy may have contracted in the second quarter, the country’s think tank has warned, leaving the powerhouse of Europe close to falling into recession.

More specifically speaking, Germany’s economy probably shrank by 9.8% in the second quarter, its biggest decline since records began in 1970, Germany’s leading institutes said on Wednesday.

“It is not unlikely that the crisis will drag on longer than expected and lead to production being frozen,” said Timo Wollmershaeuser, economist at the Ifo institute — one of the think tanks involved in producing the report.

That would be more than double the drop seen in the first quarter of 2009, when Germany was in the throes of the global financial crisis, the institutes, including the Ifo institute think tank, said.