""But the escalation in the Middle East has set us back economically. The shock has hit the structurally weakened German economy hard once again.""
""Higher energy costs, as well as the higher cost of borrowing on international markets since the outbreak of the conflict in February, were weighing heavily.""
""Before the Iran war, the economy was just getting back on its feet after the energy shock triggered by the Ukraine war and last year's US tariff blitz.""
The German government has reduced its growth forecast for 2026 to 0.5% from 1% due to the economic impact of the Middle East war. The 2027 forecast is also lowered to 0.9% from 1.3%. Rising oil and gas prices have increased inflation and costs for manufacturers. Economy Minister Katherina Reiche noted that the escalation in the Middle East has severely affected the already weakened German economy. Higher energy costs and borrowing expenses are significant burdens, particularly for heavy industries facing weak demand and competition.
Read at The Local Germany
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