According to Veronika Grimm, a supervisory board member at Siemens Energy, a period of stagnation is not unlikely given the current oil crisis. She cautioned against underestimating the impact of the war in Iran, stating in an interview with the “Rheinische Post” (Saturday edition) that “the effects will be more noticeable for longer than initially expected”. She also noted that the current mood in Germany appears overly optimistic.
Grimm commented that it is “somewhat underestimated how difficult it is to end the war” adding that all three warring parties are involved in this process. She explained that the consequences for the global economy are severe because the Strait of Hormuz handles 20 percent of oil and liquefied natural gas (LNG), in addition to a third of fertilizer shipments. Additionally, she pointed out that many production facilities have been destroyed, and “it will take years to repair the damage”.
The economist believes the recent growth projections from research institutes are too optimistic. While these institutes have halved their growth forecast, anticipating only 0.6 percent economic growth in Germany for 2026, Grimm finds this projection overly optimistic. She highlighted that the upswing could also fail, stating, “I do not consider a scenario where the upswing completely collapses and we end up in stagnation to be unlikely”.
