The German economy is set to shrink slightly this year and barely grow the next as demand from abroad is weak, government subsidies for the green transition are curbed and high interest rates dampen activity, the central bank said on Friday.

The Bundesbank's twice-yearly projections for Europe's largest economy showed a slightly smaller contraction in 2023 but also a much weaker recovery in 2024 than the previous round of forecasts in June. 2023 2024 2025 2026 HICP +6.1% +2.7% +2.5% +2.2% GDP -0.1% +0.4% +1.2% +1.3% (Reporting By Francesco Canepa; Editing by Angus MacSwan)