Germany's exports have been hit hard by the global slowdown
Germany's economy will shrink by 6% this year and continue to contract in 2010 according to a forecast from the country's leading economic think tanks.
The estimates, compiled by eight institutes for the German Economy Ministry, also predicts that the rate of unemployment will hit 10% next year.
The gloomy forecast chimes with that of the IMF, which shows the German economy contracting by 5.6% this year.
This is faster than any other major economy apart from Japan, says the IMF.
"The joint forecast of the institutes paints a very dark picture of German economic prospects in the foreseeable future," said Timo Klein at IHS Global Insight.
The latest twice-yearly forecast shows just how rapidly the outlook for the German economy has deteriorated.
The think tank's previous forecast predicted economic growth of 0.2% for this year.
The deepening global downturn now means the group sees a severe economic contraction this year and a further shrinkage of 0.5% next year.
"For 2010 the institutes expect no drastic rebound," the report said.
The IMF is forecasting a contraction in the German economy of 1% in 2010.
Comments by some of Germany's largest companies confirmed the bleak outlook for the country's economy.
"It will probably take five years before demand is back to its pre-crisis level in 2007," said Karl-Thomas Neumann, boss of car parts firm Continental.
The chief of rival Robert Bosch, Franz Fehrenbach, said: "We expect to see a deep recession until well into 2009."
The report for the Economy Ministry also forecasts a fall in exports of 22.6%, compared with its prediction of a rise of 0.1% made just six months ago.
Germany is world's largest exporter.
Unemployment, the report says, will hit 10.8% in 2010.
"Through 2009 we anticipate a loss of more than 1 million jobs... and in the [autumn] unemployment will be well over the 4 million mark," the think tanks said.
The IMF forecast sees the Japanese economy contracting by 6.2% this year before growing by 0.2% next year.