Germany’s top panel of economic advisers cut their forecast for growth this year, warning Wednesday that the war in Iran has triggered an energy shock that is squeezing households, pushing up inflation, and threatening a fragile recovery in Europe’s biggest economy.
Chancellor Friedrich Merz met with members of the German Council of Economic Experts in Berlin after they presented their spring economic report. Finance Minister Lars Klingbeil and other senior ministers also attended the meeting.
The advisers said they now expect gross domestic product to expand 0.5% in 2026, down considerably from a previous estimate of 0.9%, and forecast growth of 0.8% in 2027.
“The already weak economic performance is being hampered once again by the current energy supply shock,” the council said in its report.
“The rise in energy prices caused by the war in Iran is driving inflation, thereby reducing the purchasing power of private households,” it said, adding that high energy costs are also weighing on companies and private investment.
Consumer price inflation is expected to rise to 3.0% in 2026 and to ease only slightly to 2.8% in 2027, the council said.
By Ayhan Simsek in Berlin
Anadolu Agency
energy@aa.com.tr
