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2026-05-27 21:25:56
[Germany's Economic Forecast Downgraded Again; Middle East Conflict and Tariff Risks Combined, 0.5% Growth Become the New Normal] ⑴ The German Council of Economic Experts on Wednesday lowered its growth forecast for Europe's largest economy, mainly due to the Middle East conflict, rising energy prices, and US trade policies. In its spring report, the council predicted that Germany's economy would grow by 0.5% in 2026, down from 0.9% in November, and by 0.8% in 2027. ⑵ The German Ministry of Economic Affairs lowered its economic growth forecasts for 2026 and 2027 in April, while raising its inflation forecast. The official forecast is now 0.5% for 2026, a significant reduction from the previous 1.0%, and the 2027 forecast has been lowered from 1.3% to 0.9%. ⑶ These two consecutive downward revisions reflect the escalating external pressures facing the German economy. The Middle East situation is pushing up energy costs, and Trump's tariff rhetoric is exacerbating trade uncertainty, putting export-oriented manufacturing under double pressure. Future attention will be focused on the further impact of energy price trends and changes in global trade policies on German industrial orders.
