Wednesday, April 22, 2026

"Germany halves 2026 growth forecast on Iran war fallout"

From Agence France-Presse via Radio France International, April 22: 

The German government Wednesday halved its 2026 growth forecast due to the Middle East war energy shock, while vowing to step up reform efforts as criticism grows they are moving too slowly.  

Gross domestic product (GDP) in Europe's biggest economy is expected to expand 0.5 percent in 2026, officials said, down from a projection of one percent made in January.

The government also cut its forecast for 2027 to 0.9 percent, down from 1.3 percent.

Hopes had been high that the eurozone's traditional growth engine would sputter back to life in 2026 after years of stagnation, driven by Chancellor Friedrich Merz's public spending blitz.

But the jump in oil and gas prices since the start of the US-Israeli war on Iran has dealt the economy a heavy blow, pushing up overall inflation and raising costs for the country's crucial manufacturers.

Presenting the new forecasts, Economy Minister Katherina Reiche said that before the conflict, there had been signs of a moderate recovery.

"But the escalation in the Middle East has set us back economically," she told a press conference. "The shock has hit the structurally weakened German economy hard once again."....

....MUCH MORE 

So, with the slowdown, maybe Germany won't need the oil that is going to be cut off in eight days:

Continues:

...oil flows. In 2025, Kazakhstan’s oil exports to Germany through the Druzhba pipeline amounted to about 2.146 million metric tons, a 44% increase compared to 2024. In the first quarter of 2026 alone, shipments reached 730,000 tons. A full halt would reduce crude throughput by roughly 17% at the PCK Schwedt refinery, one of Germany’s largest refineries. 

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