Germany cuts growth outlook for 2026 and 2027

April 02, 2026 / 11:16 AM

A digital display shows the price of petrol at a Star petrol station in Berlin

Sharjah24 - WAM: A German economic report has revised down growth expectations for the country over the current and coming years, citing the impact of rising energy prices linked to developments in the Middle East.

The report, issued by a group of German economic institutes, projects that gross domestic product will grow by 0.6% in 2026 and 0.9% in 2027, following a modest 0.2% expansion in 2025. This reflects downward revisions of 0.6 percentage points for 2026 and 0.4 percentage points for 2027.

Impact of rising energy costs

According to the report, higher energy prices have weakened household purchasing power and increased production costs for businesses, slowing the pace of economic recovery.

Inflation outlook

The institutes expect inflation to reach 2.8% in 2026 and 2.9% in 2027, driven mainly by elevated energy prices, with these pressures gradually feeding into core inflation over time.