The German government has lowered its growth forecast for this year and predicted that Europe's largest economy will shrink in 2023 because of the effects of the war in Ukraine, including Moscow's cutoff of natural gas supplies, the AP reported.

The Economics Ministry said it expects Germany's gross domestic product to grow 1.4 percent this year and then decline 0.4 percent next year. In late April, it forecast growth of 2.2% in 2022, which would accelerate to 2.5% next year.

Since then, the impact of the war has intensified, with energy prices remaining stubbornly high and the annual inflation rate in Germany reaching 10% in September.

According to the Ministry of Economics, the main reason for the revision of the economic forecast was the discontinuation of Russian gas supplies and the resulting high energy prices. These high prices are causing inflation, affecting industrial production and are expected to reduce household consumption.

Economy Minister Robert Habeck, who is also Germany's vice chancellor, said that GDP, declined in the third quarter and is expected to decline again in the current fourth quarter and again in the first quarter of 2023 before starting to recover. Two consecutive quarters of negative growth is one common definition of recession.

Habeck said that despite gloomy growth forecasts, employment is likely to remain robust.

The German government predicts average inflation at 8 percent this year and 7 percent next year, a level that would be much higher without the so-called gas price brakes it plans to impose to keep household and business energy bills under control.

The economy is projected to return to growth in 2024, with GDP rising 2.3 percent.

Those numbers are bad, Habeck said. But, he said, it could have been worse if politicians hadn't acted.

An agreement among European Union members to jointly fight high gas prices is within reach, he said. The proposal entails changing the way gas is traded through a platform in the Netherlands, he said.