Germany now expects its deepest recession since World War II this year.
The government said on Wednesday the economy will contract by about 2.25% in 2009, as the global slowdown hits demand for German exports.
Unemployment hit three million in December. Another half a million people will be out of work by the end of the year.
Economy Minister Michael Glos says the downturn is without precedent in the postwar period
The BBC reports the economy slipped into recession in the third quarter of 2008.
General elections are due on 27 September.