BERLIN - Germany's central bank predicted Friday that the country's economy will shrink 0.8 percent next year as the global financial crisis takes its toll, just as parliament gave its final approval to an economic stimulus package that has been criticized as too timid.

The Bundesbank said in a twice-yearly report that the "prospects for the German economy have worsened notably since the beginning of the autumn."

The German economy — Europe's biggest — slipped into recession in the third quarter as exports weakened. Still, the slowdown has yet to translate into higher unemployment and lower consumer confidence.

The central bank said that, assuming the situation on financial markets calms and the global economy picks up, the German economy is likely to grow by 1.2 percent in 2010.

But the bank's outlook for next year is far worse than the German government's current official forecast — set in mid-October — of 0.2 percent growth.

More gloomy data came from the Economy Ministry, which said separately that new industrial orders dropped 6.1 percent in October from the previous month, following an 8.3 percent fall in September.

Andreas Rees, an economist at UniCredit in Munich, said he was lowering his 2009 forecast for gross domestic product from a 0.9 percent contraction to a 1.5 percent decline.

"The current downswing has clearly the potential to become the worst recession in German history after World War II," Rees said.

Chancellor Angela Merkel has warned Germans they face a "year of bad news" in 2009.

Her government has drawn up a stimulus package — containing measures such as tax breaks on new cars and credit assistance for companies — in an effort to soften the impact of the slowdown.

The package, which cleared its final legislative hurdle Friday with approval from the upper house of parliament, is expected to cost the government euro23 billion ($29 billion) and trigger investments of up to euro50 billion.

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