Germany's economic growth forecasts slashed amid energy and geopolitical crises
Germany's economic outlook has darkened as leading research institutes slash their growth forecasts. Their latest report, due on Wednesday, shows a sharp downgrade for 2024 and beyond. Rising energy costs and the Iran conflict have weighed heavily on expectations.
In their previous joint forecast, the institutes had predicted GDP growth of 1.3% for 2023 and 1.4% for 2024. Reality fell far short—2023 saw just 0.6% growth, while 2024 actually shrank by 0.2%.
The new projections cut 2024's expected growth from 1.3% to 0.6%, as of March 2026. For 2027, the outlook remains weak, with growth forecast at around 1%. Domestic forecasts have grown increasingly pessimistic over time, though no recent comparisons to international bodies are available. The institutes cite surging energy prices and geopolitical tensions, particularly the Iran war, as key factors behind the downturn. Their revised figures reflect a broader slowdown across the economy.
The updated forecast confirms a prolonged period of sluggish growth for Germany. With 2024's contraction already recorded, the institutes now expect only modest recovery in the coming years. The report underscores persistent challenges from external shocks and high energy costs.
