BERLIN - THE German economy ministry expects Europe's biggest economy to contract by 3.0 per cent or more next year, a press report said on Tuesday.

The possibility that gross domestic product could fall by 3.0 per cent or more, which would mark the biggest recession in Germany's post-war history, 'is not unrealistic,' the Frankfurter Allegemeine Zeitung quoted an internal ministry document as saying.

At present, the government still officially forecasts 2009 economic growth of 0.2 per cent, but will probably revise that figure lower when its next forecast is issued in late January.

Some economists have estimated that activity could contract by as much as 4.0 per cent next year.

In the Financial Times Deutschland's Tuesday edition meanwhile, the head of the respected DIW economic forecast institute called for a 'forecast pause.' 'The crisis is so specific that we cannot grasp it,' Klaus Zimmerman said.

'The situation is serious, but we cannot say to what extent.' He feared 'self-fulfilling prophesies' which arise from a raft of pessimistic forecasts.

On Monday, Chanceller Angela Merkel's spokesman Ulrich Wilhelm also said that 'all economic estimations should be very prudent.'

'Forecasts are generally based on past crises, but 'the current situation has few similarities with experiences in the past,' Mr Wilhelm added. -- AFP