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Germany's economic situation to brighten from spring - econ ministry

Facade lighting of landmarks reduced to save energy in Berlin

BERLIN (Reuters) -The situation in Europe's biggest economy is expected to improve over the course of the year from spring onwards, the German economy ministry said on Wednesday.

"We now expect the recession to be shorter and milder, if it happens at all," German Economy Minister Robert Habeck said.

A severe economic crisis has been averted despite the risks of energy shortages and high inflation, he added.

Earlier Wednesday, the government revised up its forecast for economic output and now expects the economy to grow by 0.2% this year, up from its autumn forecast of a 0.4% decline. Inflation is now seen at 6% in 2023, down from the previous 7% forecast.

Despite the brighter economic outlook, Habeck is expecting a lot of headwinds this year as the situation remains volatile.

There is reluctance to make certain investments, he said, for example in the construction sector. Data published by the German statistics office on Wednesday showed that new orders in the construction sector fell by 8.2% from January to November of 2022, compared with the same period of the previous year.

(Reporting by Christian KraemerWriting by Riham Alkousaa and Maria Martinez Editing by Kirsti Knolle)