The German economy has suffered its worst decline in more than 40 years, with GDP shrinking by 3.8% in the first quarter of 2009. The fall is the most severe on record and worse than economists had predicted, reports the Guardian. News of the contraction in Europe's largest nation sent the euro falling against the dollar.
Germany is the world's largest exporter and has been hit hard by a global slump in demand. The government now expects a record contraction of 6% in GDP this year, followed by nearly flat growth in 2010. "This is a dramatic plunge and a worse start to the year than we could have imagined," said one banker. "It can't get much worse, but not much better either."