German Institutes Cut 2026 Growth Forecast to 0.6 Percent

German institutes cut the 2026 growth forecast to 0.6 percent as the Iran war fuels inflation. Energy costs are expected to keep inflation at 2.8 percent.

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Leading economic research institutes in Germany have significantly lowered their growth projections for the national economy, citing the severe impact of the conflict in Iran. According to sources familiar with the findings, and as corroborated by the business daily Handelsblatt, the 2026 growth forecast has been slashed to 0.6%, a sharp decrease from the 1.3% projected in September.

A view of the Frankfurt skyline in Germany during a sunset on a warm autumn evening in October 2023. Photo by Kai Pfaffenbach/REUTERS.
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