Institutes expect consumers to tip Germany into recession - source

People with shopping bags walk near a shopping center, amid the coronavirus disease (COVID-19) pandemic, in Berlin, Germany December 21, 2021. REUTERS/Annegret Hilse/File Photo

BERLIN, Sept 28 (Reuters) - Lacklustre consumer sentiment will tip Germany into recession, Germany's four leading economics research institutes will say in their autumn forecast on Thursday.

The economy is likely to contract by 0.2% in the third quarter, by 0.6% in the fourth, and by 0.4% in the first quarter of next year before returning thereafter to modest growth, they will say.

The forecasts, made available to Reuters by a person familiar with the situation, have quasi-official status since they feed into government economic policy.

The person said the blame for the contraction lay with high energy costs, which have hit consumer purchasing power and mean consumers will buy less. Consumption will only start to recover next summer, the institutes will say.

Reporting by Klaus Lauer, writing by Thomas Escritt, editing by Sabine Wollrab and Gareth Jones

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