German government intends to raise its inflation forecast for this year to 6.1%

The German government intends to raise its inflation forecast for this year to 6.1% due to the consequences of the war in Ukraine.

According to a government document seen by Reuters, Germany’s annual inflation rose in March to its highest level in more than 40 years as prices for natural gas and oil products soared in response to the Ukraine crisis and are expected to remain at that level into April.

Berlin, which is due to release its spring economic forecasts on Wednesday, sees consumer price growth decline to 2.8% in 2023, according to the document.

Consumer spending is expected to rise 9.7% this year, up 0.6 percentage points more than the government had forecast in its January forecasts. In 2023, consumer spending will grow more slowly, at a rate of 4.8%, the document says.

The source told Reuters that the government intends to lower its expectations for growth in Europe’s largest economy in 2022 from 3.6% to 2.2% in spring forecasts, with growth slightly accelerating to 2.5% in 2023.