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 fallin

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.