German Economy to Shrink 0.2% in Fourth Quarter, Institute Says

The German economy, Europe’s biggest, may slide into a “technical” recession at the end of the year as domestic and foreign orders drop, the DIW economic institute said.

The economy will shrink 0.2 percent this quarter, led by a slump in industrial production, and may contract again in the first three months of 2012, the Berlin-based institute said today in an e-mailed statement.

“The euro crisis is affecting the German economy more and more,” DIW economist Ferdinand Fichtner said in the statement. A decline in gross domestic product in the first quarter “can’t be excluded.”

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