(Recasts with Steinbrueck on 2009 outlook, OECD)
By Paul Carrel
BERLIN, Nov 25 (Reuters) - The German economy could contract by as much as one percent next year, Finance Minister Peer Steinbrueck said on Tuesday after official figures showed fading exports led the country into recession in the third quarter.
A one percent contraction would mark Germany's weakest annual economic performance since the Federal Republic was founded in 1949 out of the rubble of World War Two, and would underline the extent to which the country is suffering from weakness in its export markets.
"The information I have available amounts to a corridor from around 0.2 percent (growth) to minus 1.0 percent," Steinbrueck told the Bundestag lower house of parliament during a budget debate.
The government slashed its official forecast for 2009 growth to 0.2 percent in mid-October.
But the Economy Ministry said on Monday the International Monetary Fund was expecting the German economy to contract 0.8 percent in 2009. The economy's weakest year so far since 1949 came in 1975, when it shrank 0.9 percent.
Earlier on Tuesday, the Federal Statistics Office said German gross domestic product (GDP) contracted 0.5 percent quarter-on-quarter in the July-September period of this year, in line with a preliminary estimate published earlier in November.
A weaker contribution from foreign trade more than offset a slight rise in private consumption, the data showed.
Falls in inflation and unemployment have buoyed household spending in Germany in recent months but economists say private consumption could soon ease as exporters start laying off workers due to weaker foreign demand.
"In the long run consumers will not be able to offset the declining exports and investment even with a sinking oil price, particularly as unemployment will rise again in 2009," said UniCredit economist Andreas Rees.
In its twice-yearly Economic Outlook released on Tuesday, the Organisation for Economic Cooperation and Development (OECD) said German unemployment would rise significantly.
"LONG RECESSION"
Germany has been the world's largest exporter of goods since 2003, profiting from a period of strong global growth. But as boom turns to bust in many export markets, its large exposure to the global economy means it is suffering.
Net trade shaved 1.7 percentage points from the third quarter GDP result, the Office said. Exports fell 0.4 percent on the quarter, and imports rose 3.8 percent.
Chemicals giant BASF last week cut its 2008 profit outlook for the second time in two months and said it would cut output, citing a massive decline in demand in key industries.
"We are facing a long recession -- at least until the middle of next year but with a risk that it lasts longer," Rees said.
GDP contracted 0.4 percent in the second quarter, the Office said. A recession is widely defined as two or more consecutive quarters of negative economic growth.
The economy last shrank for two straight quarters in the first half of 2003. This followed a fall in GDP in the final quarter of 2002, making for the economy's weakest patch since German reunification in 1990.
Tuesday's data showed third-quarter private consumption rose 0.3 percent, adding 0.1 percentage points to the GDP result.
A survey by the GfK market research firm also showed consumer morale should improve in December.
The more positive mood contrasted with reports from Italy and the Netherlands, where consumer morale fell this month.
Retail group Arcandor said last week that the German Christmas shopping season had started without signs of a recession for the group.
"One can see in the GfK consumer sentiment data that when price increases are no longer a factor, consumer morale improves quickly," said DekaBank economist Sebastian Wanke. "But this won't last long. The threat now is rising unemployment." (Reporting by Paul Carrel and Noah Barkin; Editing by David Stamp))