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German Economy Seen Shrinking Next Year Due to Energy Crisis

  • Leading institutes slash forecast due to soaring gas prices
  • Inflation in Germany projected to accelerate to 8.8% next year
Updated on

Germany’s economy will likely contract by 0.4% next year due to the impact of the energy crisis, according to the nation’s leading research institutes, who slashed their forecast from April of a 3.1% expansion.

German output will be €160 billion ($154 billion) lower this year and next than projected five months ago partly due to the drastic increase in energy costs, the four institutes predicted Thursday in a twice-yearly report which the government uses as guidance for its own outlook.