Germany’s economy will shrink by 6% this year, making it one of the worst-performing large economies, the government said yesterday after slashing its official growth forecast.

Yet growth would resume next year, ending the worst recession in the federal republic’s history, said the government, brushing aside calls for a new fiscal stimulus to prop up consumption at home.

The new forecast, down from an expected 2.25% contraction, underlines the impact the global downturn has had on Germany’s export-reliant economy. Of the world’s largest economies, only Japan is expected to shrink faster.

Financial Times