Germany’s recession will be milder than expected, with the economy expected to contract by 0.1 per cent in 2023 compared to a previous forecast of shrinking by 0.3 per cent, the Ifo economic institute said on Wednesday.

The economy is expected to grow by 1.8 per cent in 2022 compared to a previous forecast of 1.6 per cent. Inflation is seen at 7.8 per cent this year, 6.4 per cent next year and 2.8 per cent in 2024, Ifo said in a statement.

Economic growth is expected to bounce back to 1.6 per cent in 2024.

“In the two quarters of the winter half-year 2022/23, the gross domestic product shrinks, but then it goes up again,” said Ifo’s head of forecasts, Timo Wollmershaeuser.