"In our forecast out this spring, we still hoped ... for economic growth of plus 0.3%, but now we are forced to adjust this figure to minus 0.2%," Habeck said during the presentation of the new forecast.
This will be the second consecutive year in which the German economy declined, although the German government expects a 1.1% growth of the country's GDP in 2025 due to the new package of measures to support the economy, the minister added.
"In addition to market risks, Germany's structural problems are having an impact, and this is happening amid serious geo-economic challenges," Habeck also said, adding that his ministry had also adjusted the inflation forecast for this year by 0.2 percentage points to 2.2%.
The minister cited demographic changes in the country, Germany's difficult competitive position and "persistently weak demand at home and abroad" as factors negatively affecting GDP growth.
The German economy is currently experiencing a recession, caused, among other things, by high energy prices due to the lack of gas supplies from Russia. Last year, the country's GDP shrank by 0.3%.