German government expects economy to contract by 0.4% in 2023 – Reuters

The German government still expects the economy to tip into recession next year despite the gas price brake that was presented on Monday, Reuters reported on Tuesday, citing government sources.

The economy is now expected to contract by 0.4% in 2023 and inflation is seen at 8% and 7% in 2022 and 2023, respectively.

Market reaction

This headline doesn't seem to be having a noticeable impact on risk mood. As of writing, Germany's DAX 30 Index was down 0.83% on a daily basis at 12,171.81 points.