The Federation of German Industries (BDI) anticipates only modest economic growth this year. When asked about the economic outlook for 2026, BDI Chairman Peter Leibinger told the “Rheinische Post” that the situation “depends on how the Iran War progresses”. However, he added that even if the conflict ends quickly, significant growth in Germany during the current year is unlikely. Earlier in the year, the BDI forecast projected one percent growth. The impact of the Iran War is now expected to reduce growth by at least 0.3 to 0.5 percentage points. According to Leibinger, this increases the risk that, in 2026, the economy will effectively stagnate around zero growth while inflation expectations remain high, which will not improve the overall situation. He stated, “We have effectively become poorer because of the Iran War, and the recovery has been delayed”. The BDI Chairman noted that there had been some positive signs in the economic early indicators before the war. Despite this, he expressed increased skepticism, warning that if the government fails to use the next two months before the summer recess for fundamental structural reforms, a further economic decline could occur.
Economy / Finance
