The German economy is growing less than expected this year.

This is due to the sky-high energy prices and the shortage of chips, which mainly affect the German car manufacturers.

The German government announced this on Wednesday.

Germany is the Netherlands' most important trading partner and has the largest economy in the EU.

The Germans previously assumed that their economy would grow by 3.5 percent this year compared to last year.

That forecast was scaled back to 2.6 percent on Wednesday.

As a result, the economy of the eastern neighbors this year will no longer be at the level it was before the corona crisis.

That point is expected to be reached early next year.

The German car industry, an important pillar of their economy, is suffering from a shortage of semiconductors and other electrical components.

Furthermore, German companies have to deal with the recently sharply increased prices for gas and electricity.

The German government does think that the economy is expected to grow faster next year than initially thought.

The Germans now expect growth of 4.1 percent next year, where it was previously 3.6 percent.

To end the chip shortage, the German government wants to help set up its own chip industry.

The cabinet wants to allocate several billion euros for this.