According to the German Welle radio website reported on October 10, the International Monetary Fund (IMF) said on the 10th that Germany will suffer a more severe economic recession than previously predicted.
Germany, Europe's largest economy, is expected to be the only highly industrialized country in the Group of Seven that will fail to grow in 2023.
The IMF says Germany's economy is expected to shrink 0.5 percent this year, hurt by high inflation and a decline in manufacturing.
Back in July, the Washington-based institution had forecast negative growth of 0.3 per cent.
The IMF's recent view is that the German economy is facing a number of challenges, such as "weakness in interest-sensitive sectors and slowing demand from trading partners."
However, the IMF said that the German economy is expected to recover and grow by 0.9% in 2024, but this forecast is more pessimistic than the previous estimate of 1.3%.
Pierre-olivier Guranza, the IMF's chief economist, said two "very powerful forces" were having a negative impact. Germany's strong manufacturing sector is energy-intensive, and its heavy reliance on Russian energy supplies has been disrupted.
Tighter monetary policy and rising inflation have also kept investment relatively weak. In addition, Germany faces long-term structural problems, such as an aging society and a shortage of skilled workers.