The Bundesbank said the war involving Iran will slow Germany’s recovery but
fiscal stimulus should help restore growth over the coming years. It now
forecasts GDP growth of 0.5% in 2026, 0.8% in 2027 and 1.4% in 2028, with
near-term growth revised down versus its December projection. GDP is expected to
be flat in Q2 and to tick up in Q3. The bank warned that a sharp rise in energy
prices will weaken household purchasing power and consumption, but said activity
will regain momentum through falling energy costs, stronger global growth and
substantial fiscal support during the outlook period.
