The Federation of German Industry (BDI) anticipates only minimal economic growth this year. Speaking to the “Rheinische Post” (Saturday edition), BDI Chairman Peter Leibinger stated that projections for 2026 depend on the course of the Iran conflict. However, he added that even if the conflict ended quickly, noteworthy growth in Germany during the current year is unlikely. Earlier this year, the BDI forecast had projected one percent growth. The shock from the Iran conflict has now resulted in a loss of growth equivalent to at least 0.3 to 0.5 percentage points. Leibinger noted that this increases the risk that the economy may essentially stagnate in 2026, while inflation expectations remain high, complicating the situation. He stated, “We have factually become poorer because of the Iran conflict, and the recovery has been delayed”. Furthermore, although there had been some initial improvement in business cycle early indicators before the war, the BDI President became more skeptical. He warned that if the government does not utilize the two months leading up to the summer recess for fundamental structural reforms, further economic decline is threatened.
German Industry Group Downgrades 2026 Growth Forecast Predicts Slow Year Ahead
