German Economic Outlook Weakens Amid Middle East Conflict
A DIHK survey of 23,000 companies shows business sentiment has fallen to levels last seen during the pandemic. The chamber lowered its 2026 growth forecast to 0.3 percent as geopolitical uncertainty and structural issues weigh on the export industry.
Germany slashed its 2026 GDP growth forecast to 0.3% as the conflict in Iran erases early-year recovery gains. The new projection from the German Chamber of Commerce and Industry (DIHK) marks a sharp drop from the 1% growth previously expected. Investors face a stalled European powerhouse struggling with both regional instability and deep-seated structural weaknesses.
### Business Sentiment Hits Pandemic Lows A DIHK survey of 23,000 companies shows that more than 25% of German firms now describe their current situation as poor. Only 23% of businesses reported positive conditions, a level of pessimism comparable to the 2020 pandemic era. Business outlooks have darkened, with 33% of companies expecting conditions to worsen over the next 12 months.
