Germany must take energy-saving measures in the face of skyrocketing inflation, which is hurting households and businesses and dampening economic prospects. This is stated in the report of a group of five economic consultants, reports Reuters.

They said only households that cannot cope with high energy prices and firms with a viable business model that face particularly high burdens should be helped, while the top income tax rate should be raised.

The group cited a robust labor market and stimulus from bailout measures, especially lower gas prices, in its somewhat less pessimistic forecast for the German economy, predicting growth of 1.7% this year and a 0.2% decline next year.

The government's latest forecast calls for 1.4% growth this year and a 0.4% contraction next year.

In addition, expanding and diversifying energy supply while encouraging consumers to reduce their use is important. Germany has to adapt to the new reality, said one member of the group, Veronika Grimm. To reduce dependency and increase the sustainability of value chains, energy imports and sources of critical raw materials must be diversified, she added.

The state must support companies in this effort through strategic alliances, trade agreements or investment guarantees for German companies in non-EU countries.