Germany's economy will shrink by 6 percent this year and will continue to contract in 2010 as its key export sector is hit by the global economic crisis, leading German economic research groups predicted Thursday, according to AP. The organizations, which include Munich's Ifo Institut and Kiel's Ifw, said the continuing slump would lead to a spike in unemployment as businesses struggle to keep afloat. «Through 2009 we anticipate a loss of more than 1 million jobs... and in the fall total unemployment will be over the 4 million mark,» the think tanks said in a statement. «For 2010 the institutes expect no drastic rebound. GDP should sink 0.5 percent and by the year's end we anticipate just under 5 million unemployed.» The dour prediction comes a day after the International Monetary Fund forecast that the German economy, Europe's largest, would contract by 5.6 percent this year as its export-dependent industry continues to suffer from weaker demand around the world. The IMF had predicted only a 2.5 percent decline in January. Meanwhile, German Economy Minister Karl-Theodor zu Guttenberg said Wednesday that the government expects a contraction of more than 5 percent in 2009, but did not give a specific figure. The government had predicted a 2.25 percent decline in January, and is due to give its official revised figure next week.
