German think-tank says economy likely to shrink in unusually cold 1st quarter

German economy to shrink in Q1, think tank says

BERLIN — A leading German think-tank says it expects the country’s economy — Europe’s biggest — to contract in the first quarter because of an unusually harsh winter.

The IfW group said Thursday that the economy should make up for the expected contraction in first-quarter gross domestic product during the rest of 2010.

IfW says it is sticking to a forecast that GDP will grow by 1.2 percent for the year as a whole. It predicts a “noticeable” first-quarter contraction but doesn’t give a precise figure.

Germany’s economy returned to modest growth last year after a sharp recession, but stagnated in the fourth quarter.

The country has seen persistent snow and subzero temperatures since the new year — a combination that tends to weigh on sectors such as construction.