German Banks Cut GDP Forecast To 1 Percent As Inflation Rises 2.6 Percent

Private banks in Germany forecast a GDP growth of 1.0 % for the current year-a decline of 0.4 percentage points from their late‑autumn estimate. They also predict consumer prices to rise by 2.6 %. Looking ahead to 2027, the banks see a 1.5 % increase in economic growth.

These projections are made amid significant uncertainty due to the war in Iran. The main assumption is that energy prices on global markets will fall again from May. In a “risk scenario” featuring prolonged high oil prices, the banks project just 0.6 % growth and inflation exceeding 3 % in Germany.

“The key question is: when will oil tankers once again pass through the Strait of Hormuz?” remarked Felix Hüfner, chief economist for Germany at UBS Investment Bank and chair of the association’s Committee for Economic and Monetary Policy.