By Maria Martinez
BERLIN, April 22 (Reuters) – Germany’s economy ministry on Wednesday slashed its growth forecasts for 2026 and 2027 and raised its inflation projections, as the Iran war drives up oil and gas prices.
The government now expects 0.5% growth for 2026, down from an earlier projection of 1.0%, and cut its 2027 growth outlook to 0.9% from 1.3%.
“The economic recovery expected for this year is once again being held back by external geopolitical shocks,” German Economy Minister Katherina Reiche said.
Europe’s largest economy has been struggling since the pandemic to regain momentum. Heightened competition from China and higher energy costs, caused first by the Ukraine war and now exacerbated by the Iran conflict, are posing significant challenges its export-driven economic model.
The ministry now expects inflation to accelerate to 2.7% this year and 2.8% in 2027, up from 2.2% last year.
(Reporting by Maria Martinez, editing by Kirsti Knolle)
