BERLIN, Oct 11 Reuters The German government expects the economy to shrink by 0.4 this year due to persistent inflation, high energy prices and weak international trade, the economy ministry said on Wednesday, confirming a Reuters exclusive from last week.

The government had predicted growth of 0.4 for 2023 in its April forecast, but weakness in the industrial sector and the highest interest rates in a decade are spurring fears of recession in the euro zone39;s largest economy.

The German economy already suffered a recession in the last quarter of 2022 and the first quarter of 2023. A technical recession is defined as two consecutive quarters of contraction.

According to the latest forecast, the German economy is expected to rebound in 2024 and 2025, growing by 1.3 and 1.5, respectively.

Inflation is expected to come in at 6.1 this year, slowing to 2.6 next year and 2.0 in 2025, the forecast shows.

Earlier this month, the International Monetary Fund cut its forecast for the German economy to a 0.5 contraction this year, compared with a 0.3 decline projected previously.

Reporting by Maria Martinez, Editing by Friederike Heine and Rachel More

Source Reuters