Reducing German economic growth expectations

Sources told Reuters yesterday that the major German economic institutes reduced their expectations for economic growth in 2026 and 2027, and sharply raised their inflation expectations, due to the Iran war.

The institutes reduced their growth expectations for the current year to 0.6%, from 1.3% that was expected in September.

The sources stated that the economic institutes also reduced their forecasts for growth next year to 0.9%, from a previous estimate of 1.4%.

The German economy, which is dependent on exports, has been experiencing difficulties in growth since the “Covid-19” pandemic, as it has been exposed to exhaustion due to competition from China and high energy prices.