BERLIN (Reuters) – The German government expects the economy to contract by 0.4% this year in its outlook due next week, Reuters learned on Friday from a source briefed on the matter.

The euro zone’s largest economy should then grow by 1.3% next year and 1.5% in 2025, again according to this source.

In its forecasts released in April, the government expected economic growth of 0.4% for this year.

The new forecasts are expected to be presented on Wednesday by German Economy Minister Robert Habeck.

When contacted, the Ministry of the Economy was not available for comment.

Regarding inflation forecasts, the government is counting on a price increase of 6.1% this year and 2.6% in 2024, according to the source.

The European Commission last month lowered its forecast for Germany’s gross domestic product (GDP), expecting a contraction of 0.4% this year, compared to growth of 0.2% in the previous forecast.

German economic institutes such as Ifo and DIW also expect the economy to contract by 0.4% this year.

(Holger Hansen report, written by Miranda Murray, Claude Chendjou, edited by Blandine Hénault)

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