The German economy, the biggest in Europe, in 2009 may face the worst contraction since the end of World War II, the country's annual economic report said Wednesday.

The German economy may contract by as much as 2.25 percent this year and might only show the first signs of recovery in the second half of the year, the report said.

"It is the sharpest contraction in German economy after World War II" Economy Minister Michael Glos told reporters. The main reason for that is a decline in exports, the main driving force of the German economy, he said.

German exports, which increased 3. 9 percent in 2008, will plunge 8.9 percent in 2009, the report said.

Meanwhile, Germany's unemployment rate will increase from 7.8 percent in 2008 to 8.4 percent in 2009, with the number of jobless people reaching 3.5 million, the report said.

Investments in equipment will change from a 5. 3-percent increase in 2008 to an 11.9-percent decrease in 2009, the report said.

Despite the bad data, private consumption will still enjoy a slight increase of 0.8 percent in 2009, due to tax reforms, the report said.

(Xinhua News Agency January 22, 2009)