BERLIN, Germany (Reuters) -- The German economy contracted by 0.1 percent in the second quarter from the first quarter, according to data from the Federal Statistics Office that showed Europe's largest economy was in recession in the first half.
After gross domestic product contracted by 0.2 percent in the first quarter, the figures mark the second time in two years that Germany has entered recession -- commonly defined as two consecutive quarters of contraction.
The German figures bode ill for euro zone preliminary second-quarter GDP data due to be released at 1000 GMT, after data last week showed Italy was also in recession in the second quarter.
Germany and Italy together account for around half of the euro zone economy. Economists polled by Reuters forecast the 12-nation region failed to grow at all in the second quarter, after growing a mere 0.1 percent in the first quarter.
The Statistics Office said the contraction was due to a decline in exports which could not be offset by slightly stronger domestic consumption.
"The decline in output in the second quarter was characterised by a decline in exports, which was stronger than the decline in imports,'' the Statistics Office said in a statement.
The fall, adjusted for seasonal factors and differences in the number of working days, was in line with a forecast for a contraction of 0.1 percent in a Reuters poll of 20 economists.
Analysts said the strong euro was braking export growth, traditionally the mainstay of the German economy, leaving the country dependent on private consumption to underpin a recovery.
"What we feared would happen has happened -- exports fell because of the strong euro and domestic demand failed to provide any impetus,'' said Rainer Sartores, an economist at HSBC Trinkaus & Burkhardt.
The euro has gained over seven percent against the dollar this year, hammering exports by making German goods more expensive abroad.
Year-on-year, second-quarter GDP shrank 0.6 percent, the Office said. Adjusted for the number of working days, the economy shrank by 0.2 percent. Economists polled by Reuters had predicted a year-on-year contraction of 0.1 percent.
Slight upturn in second half
Economists said they expected the German economy to pick up slightly in the third and fourth quarters, offsetting the negative first half.
"Our expectation is that we'll see a slight improvement in the second half but exports will continue to burden. However, imports should improve and we should see an improvement in domestic consumption,'' said Rainer Guntermann, an economist at Dresdner Kleinwort Wasserstein.
"On the whole we expect zero growth this year,'' he added.
Weak industrial output numbers last week already signalled the German economy would contract, although sentiment indicators have provided hope a recovery is on the way.
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