The German government will raise its economic growth forecast for this year to 0.3%, from a previous forecast of 0.2%, a source told Reuters on Friday.

In 2025, the government expects gross domestic product to grow by 1.0%, according to the source.

Inflation is expected to fall faster than previously expected, going down to 2.4% this year. The government had forecast 2024 inflation at 2.8% in previous projections.

These forecasts are part of the draft spring projections of the government, which Economy Minister Robert Habeck is due to present next Wednesday.

The economy ministry declined to comment.

The German economy, Europe's biggest, was the weakest among its large euro zone peers last year, as high energy costs, feeble global orders and record-high interest rates took their toll.

Although inflation and energy prices are expected to ease this year, growth is forecast to remain weak.

This week, the International Monetary Fund cut its forecasts for German GDP by 0.3% for both 2024 and 2025, expecting 0.2% growth this year and 1.3% next year. (Reporting by Holger Hansen, writing by Maria Martinez, editing by Rachel More, Sabine Wollrab, Matthias Williams and Alex Richardson)