BERLIN (AP) — The German government forecast Wednesday that the country’s economy, Europe’s biggest, will grow by only 2.2% this year as Russia’s war in Ukraine weighs on prospects.

The Economy Ministry chopped the outlook for gross domestic product from the 3.6% growth it forecast in January. It sees only slightly faster growth of 2.5% in 2023.

The government’s revised outlook was gloomier than a recent assessment by leading economic think tanks that expected the economy to expand by 2.7% this year.

But the government outlook was more optimistic than a prediction of 1.8% growth by its own panel of independent economic advisers. Last year, Germany’s GDP grew by 2.9%.

Economy Minister Robert Habeck said the government was making a “conservative” estimate, pointing to still-fragile supply chains, the effect of sanctions against Russia on the availability of raw materials and the ongoing effects of the coronavirus pandemic.

The 2.2% growth prediction assumes no energy embargo or blockade of gas deliveries, Habeck said. “If this came on top, we would have a recession in Germany,” he said.


Russian imports account for a significant, though declining, proportion of Germany’s gas supplies. Habeck said that proportion has declined from 55% before the war to 35% now.

Chancellor Olaf Scholz’s Cabinet on Wednesday approved a package of measures designed to ease the strain on consumers of higher energy prices. It includes lowering the tax on gasoline, cheap tickets for public transportation and one-off payments of several hundred euros to each taxpayer.

The cost to the public purse was estimated at “significantly more” than 30 billion euros ($32 billion), government spokesman Steffen Hebestreit told reporters.