Nov. 13 (Bloomberg) — The German economy, Europe’s largest, contracted more than economists expected in the third quarter, pushing the nation into the worst recession in at least 12 years.
Gross domestic product dropped a seasonally adjusted 0.5 percent from the second quarter, when it fell 0.4 percent, the Federal Statistics Office in Wiesbaden said today. Economists expected a 0.2 percent decline, the median of 40 forecasts in a Bloomberg News survey showed. The economy last contracted this much over two consecutive quarters — the technical definition of a recession — in 1996.
German companies are struggling with dwindling export orders. Siemens AG, Europe’s biggest engineering company, reported a profit decline today and plans to cut 16,750 jobs by 2010. The Organization for Economic Cooperation and Development lowered its global forecast for the second time, saying the economy of its 30 members will contract 0.3 percent in 2009 after growing 1.4 percent this year.
“The German recession has begun in earnest and it’s very serious,” said Holger Schmieding, chief European economist at Bank of America Corp. in London. “It raises the risk of a German contraction of more than 1 percent next year and we will have to revise down our forecast for the euro area as well.”