Pushed by high energy and food prices, inflation rose to 10% in September in Germany. 

The figure was 7.9% in August. Inflation was being spurred on by rising energy prices which have soared since the Russian invasion of Ukraine. 

According to the federal statistical office, Destatis, energy prices were 43.9% higher in September 2022 this year than in the same month last year. 

Destatis said the end of a fuel subsidy and the €9 public transport ticket "presumably had an impact on the inflation rate in September." 

German Chancellor Olaf Scholz announced on Thursday plans for an energy relief package worth €150-200 billion ($145-194 billion).  

"The German government will do everything so that prices sink," Scholz said in a press conference. 

Germany expected to enter recession 

The inflation announcement follows a forecast by a leading group of think tanks earlier on Thursday that painted a bleak picture for Germany's future economic prospects.

According to the think tanks' projections, the crisis in the gas markets, spiraling energy prices and a massive drop in purchasing power would push the German economy into recession.

The high cost of energy was the leading factor "driving Germany toward recession," said Torsten Schmidt, head of economic research at the RWI think tank.

Schmidt told a media briefing that Europe's largest economy would shrink over the second half of 2022.

Incomplete recovery from the global pandemic was among the factors contributing to Germany's economic future.

Inflation forecast to average at 8.8% in the coming year

Munich's ifo Institute said in a statement earlier on Thursday that inflation would likely average at 8.8% in the coming year.

Inflation is expected to settle down in 2024 — "to be only slightly above the ECB’s target rate of 2%."

German GDP is also expected to shrink by 0.4% in 2023, down from April's estimate of 3.1% growth, before rebounding back to a state of growth in 2024.

The forecasts came Thursday as part of the so-called Joint Economic Forecast, which is prepared twice a year by the ifo Institute in Munich, the Kiel Institute for the World Economy, the Halle Institute for Economic Research (IWH), and the RWI — Leibniz Institute for Economic Research.

Global economy in the doldrums

Germany is not alone in the economic challenges it is facing. According to the joint statement the global economy is in a downturn, with Russia's war against Ukraine and subsequent Western sanctions against Moscow fueling the level of inflation for energy commodities.

The high levels of inflation have prompted the US Federal Reserve, along with many other central banks, to tighten monetary policy.

The joint report also pointed to China's zero-COVID strategy, which prohibits economic activity during periods of lockdown, and a bubbling real estate crisis as having impacts on the economy.

While you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter Berlin Briefing.

fb, kb/sms (AFP, dpa)