Why is Germany's economy shrinking? | DW News |

Economists say skyrocketing energy prices in 2022 -- linked to Russia's LNG suppliers profiteering from war in Ukraine -- put a halt to post-pandemic economic recovery.This drove up inflation, meaning people could buy less with their money, and dampened industrial production.

"Industry and private consumption are recovering more slowly than we had expected in spring," said Oliver Holtemöller, vice president of the Halle Institute for Economic Research (IWH).

Germany below EU average | DW News |

The new report confirmsthe International Monetary Fund's forecast from earlier this year that Europe's largest economy is set to shrink in 2023.

Recent figures from other major European economies like the UK and Italy show that they might face economic contraction as well. However, Germany's neighbor France is on track to rebound to a growth rate of 1% in 2023, according to European Commission figures.

Across the European Union as a whole, the Commission currently predicts 0.8% growth, putting Germany well below the bloc's average.

2023 Global Macroeconomic Midyear Outlook: Slower Global Growth with Bright Spots in Emerging Markets  Research Morgan Stanley |

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