Germany lowers 2023 inflation forecast citing gas price brake - govt sources

Without the brake, the inflation rate would have been significantly higher, especially in 2023, the sources told Reuters. The German government still expects Europe's largest economy to slide into recession next year, contracting by 0.4% as an energy crisis, rising prices and supply bottlenecks take their toll, according to the sources.

The German government expects inflation to reach 8.0% this year and 7.0% next year based on the price-dampening effects of a gas price brake that was presented on Monday, according to government sources. Without the brake, the inflation rate would have been significantly higher, especially in 2023, the sources told Reuters.

The German government still expects Europe's largest economy to slide into recession next year, contracting by 0.4% as an energy crisis, rising prices and supply bottlenecks take their toll, according to the sources. A source, citing provisional figures, told Reuters last week that the government expected 2022 inflation to run at 7.9% and 2023 inflation to hit 8%.

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