Recession hits Germany

The German economy, the largest in Europe, has entered a recession, according to data published yesterday that showed its gross domestic product shrank for a second consecutive quarter. The Federal Statistics Office reported that German GDP contracted 0.5% in the third quarter, more than the 0.2% decline that had been anticipated. That follows a decline in the second quarter of 0.4%, a slight revision from the 0.5% decline announced previously. The contraction was caused by the negative impact the global financial crisis was having on German exports, which had been the engine of the country’s growth. At the same time, there was a surge in imports, and the balance of exports and imports had a negative impact on the development of the gross domestic product.

The Organization for Economic Cooperation and Development (OECD) forecast on Thursday that all the world’s major industrial countries were headed for a major slowdown. The organization, based in Paris, said the United States and Japan, as well as the eurozone, would undergo economic contractions in 2009 before recovering slightly in 2010. Figures expected later today from Britain, Italy and the Netherlands were likely to show declines as well.