The Hamburg Institute of International Economics (HWWI) expects the German economy to recover gradually at best over the remainder of 2023. The slowdown will be triggered by a restrictive monetary policy. The HWWI expects negative economic growth of -0.5% in 2023. In 2024, the economy could grow noticeably again at 1.25%. The prerequisites for this are no further tightening of monetary policy or geopolitical uncertainties. Inflation has peaked, but the rise in consumer prices is still high at 6.1%. Lower energy and other commodity prices suggest a further decline. By the end of this year, the inflation rate could fall below 4%, but at 2.5% it could still not quite reach the 2% stability mark by the end of 2024. However, the risks of a less favorable development are considerable. The European Central Bank (ECB) now faces the challenge of directing further monetary policy stimuli in such a way that the disinflation process that has been initiated can be successfully completed on the one hand and the economy is not completely stifled on the other.