Germany is facing an economic contraction and a recession due to challenges in the manufacturing sector, disappointing China reopening boost, and higher energy costs, according to Peter Oppenheimer, chief global equity strategist at Goldman Sachs. The German economy is likely to shrink this quarter, with slow private consumption and industry stuttering. However, there are some positives, such as the equity market holding up well and opportunities in Germany's small and mid-sized companies. Goldman Sachs predicts "fat and flat" returns for Germany's DAX index going forward, but warns that geopolitical tensions and curtailed world trade could hinder the German recovery.

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