The German government expects Europe's biggest economy to fall into recession next year, contracting 0.4% due to the energy crisis, rising prices and supply shortages.
The government has cut its growth forecast for 2022 to 1.4% from an April projection of 2.2%, the source added. It previously forecast 2.5% growth for 2023.
The government also expects inflation to remain in the high single digits, at 7.9% this year and 8% in 2023, sources said, although this figure could change slightly depending on the impact of gas price changes. The government expects the economy to return to 2.3% growth in 2024.
When contacted for comment, a spokesman for the economy ministry said Economy Minister Robert Habeck would reveal the actual figure next week.
The figure is based on projections by leading economic institutes where they have reduced their economic growth forecast this year and reduced their 2023 forecast to -0.4% from 3.1%.
Europe has been rocked by gas shortages since Russia invaded Ukraine in February, leaving governments scrambling to secure energy supplies and protect households from rising prices.
Chancellor Olaf Scholz last week set out a 200 billion euro ($197 billion) aid package that includes gas price and sales tax cuts for the fuel.
German inflation was at its highest rate in more than a quarter of a century in September, driven by high energy prices, with analysts warning the worst was yet to come.
