FRANKFURT - THE German economy has fallen into recession as the world's leading exporter falls victim to the global financial crisis, official figures from national statistics service Destatis showed on Thursday.

Europe's biggest economy contracted 0.5 per cent in the third quarter, more than expected, following a contraction of a revised 0.4 per cent in the second quarter, meeting the technical definition for a recession of consecutive quarterly negative growth.

Analysts polled by Dow Jones Newswires had forecast a smaller contraction of 0.1 per cent in the third quarter.

The second quarter was originally given as a contraction of 0.5 per cent after the economy expanded 1.4 per cent in the three months to March.

On Wednesday, a panel of top economists warned that growth would come to a halt next year and blasted government plans plans to bolster the economy.

They put growth this year at 1.7 per cent Berlin recently cut its forecast for economic growth to 0.2 per cent in 2009 as the financial crisis continues to send shock waves around the world.

The world's leading exporter has been hit by weakening activity in its major markets while domestic consumption has remained at low levels.

Corporate investment has suffered in turn from a sharp decline in business confidence.

On Wednesday, the economists' panel dismissed plans for a multi-billion-euro bundle of tax breaks and state investment as a 'hotch-potch of isolated projects designed to give the impression that the government is doing something'. -- AFP