German Finance Minister Christian Lindner said in Davos on Tuesday that the country will experience a “very moderate” recession in 2023, but he is confident about his country’s economic prospects, CNBC reports.

“We still have to deal with high uncertainty, but I think the economic outlook is improving,” Lindner told CNBC in an interview at the World Economic Forum in Davos.

He added that he is more optimistic about 2023 and 2024 than he was a few months ago.

“There is an opportunity to see a faster economic recovery and a faster-than-expected decline in inflation,” Lindner said.

At the beginning of the current month, December inflation in the country was lower than estimated, falling to 9.6%.

Lindner said he expects a “very mild” recession, but also believes the German economy is resilient.

This applies to both the wider industry and mid-sized companies, he explained.

“The German economy managed to reduce gas consumption by more than 20% without cutting production, so this shows our resilience,” said the finance minister, referring to the pressures facing the European economy since the start of the crisis in Ukraine.

He said the German government was now focusing on “strengthening the competitiveness” of its economy.

Lindner also referred to the US administration’s Inflation Reduction Act, which he said raises some concerns.

“We need commercial diplomacy, not any kind of trade war or competition between the United States and the European Union over who can afford to pay more subsidies.

There will be two losers – the US and the European Union,” said Lindner.

While he said he understood the US government’s areas of interest in the green transition and its relationship with China, he also believed that “negative spillovers to the European Union and our bilateral trade relationship” should be minimized.