German govt sees economy shrinking up to 0.3% this year – Bloomberg News

BERLIN (Reuters) -The German government will downgrade its economic forecast for this year to a contraction of as much as 0.3%, Bloomberg News reported on Wednesday, citing a person familiar with the revised forecast.

The government had predicted economic growth of 0.4% for 2023 in its April forecast.

The economy was likely to shrink in the third quarter and expand only slightly in the fourth, people familiar with the forecast told Bloomberg.

However, those figures could still change before the economy ministry publishes its autumn forecast next month, they said.

An economy ministry spokesperson said the ministry could not confirm the figures and said preparations for the autumn projections, which will be presented by Economy Minister Robert Habeck on Oct. 11, were still underway.

“Therefore no statements can be made about it,” said the spokesperson.

The German economy ministry said in its monthly report on Wednesday that the economy would likely remain very weak in the third quarter and was not expected to pick up speed until around the turn of the year.

Earlier this week, the European Commission cut its forecast for the German economy to a 0.4% contraction this year, compared with the 0.2% growth projected previously.

German economic institutes such as Ifo and DIW also expect a 0.4% contraction.

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