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Leading economic institutes cut their growth forecasts for Germany, warning that surging inflation resulting from the Middle East war would hit Europe’s top economy hard, AFP reports.
The German economy should grow by 0.6 per cent in 2026, the seven institutes said, down from a September forecast of 1.3pc, while inflation is predicted to rise to 2.8pc, up from 2.0pc.
“The energy price shock triggered by the Iran war is hitting the recovery hard,” said economist Timo Wollmer shaeuser of the Ifo institute, adding that increased government spending was nevertheless “preventing a stronger slide”.
