Gross domestic product (GDP) of the country contracted 0.5 percent in the third quarter, the Federal Statistics Office in Germany said following a 0.4 percent drop in the second, which corresponds to the official definition of a technical recession – two consecutive reductions in GDP.
The last time the country was in a period of such high unemployment and low economic activity was during the first half of 2003.
"A negative effect on gross domestic product came from foreign trade, with a strong increase in imports and weakening exports," the government body said.
The third-quarter contraction was much worse than expected. Analysts had predicted around 0.1 percent, but the slump in world trade has hit Germany, the world's leading exporter, more severely than expected.
Germany is the second euro zone country to fall into recession – its first in five years. Ireland's economy contracted during the first half of the year.
The deepening economic weakness in Europe underlines the degree to which the fall-out from the financial crisis is now spreading to the wider economy. The International Monetary Fund last week forecast that Japan, the U.S. and Europe will all be in recession next year for the first time since World War Two.