Leading institutes see German economy shrinking 4.2% this year - sources

BERLIN (Reuters) - Germany's leading economic research institutes expect Europe's biggest economy to shrink by 4.2% this year due to the effects of the coronavirus, two people familiar with the numbers told Reuters on Tuesday, before rebounding by 5.8% next year.

Envisaging a serious recession, the institutes are due to announce their latest forecasts on Wednesday.

Factories in Germany have stopped production and shops, businesses and restaurants have shut in an effort to slow the spread of the virus.

Economy Minister Peter Altmaier has said the economy may shrink more this year than it did during the 2009 financial crisis when it contracted by 5.7%. Before the outbreak of the coronavirus, the government expected growth of 1.1% this year.

The institutes' forecasts, which may yet alter slightly before the announcement on Wednesday, forms the basis for the government's own economic predictions.

(Reporting by Rene Wagner and Klaus Lauer; Writing by Madeline Chambers, editing by Thomas Escritt)