slashed its growth forecast Wednesday, predicting Europe's top economy will shrink this year as it battles high inflation, elevated energy prices and a manufacturing slump.
"In a difficult geopolitical environment, we are emerging from the crisis more slowly than expected," Economy Minister Robert Habeck acknowledged in a statement. The German economy fell into recession around the turn of the year and has since been struggling to get back on its feet, registering zero growth in the second quarter.The International Monetary Fund on Tuesday forecast Germany will be the worst performing major economy in 2023, shrinking 0.5 percent.
Inflation is expected to come in at 6.1 percent this year, before declining to 2.6 percent next year and two percent in 2025, the economy ministry said."The course for a sustainable economic recovery has been set: the decline in inflation is significant, and with it, real incomes are rising again."