German institutes cut growth forecast as Iran war drives inflation higher - Reuters

<a href="https://news.google.com/rss/articles/CBMivgFBVV95cUxQN0JuN3dMdXNmZk52M084eS1yQUNkN0s3UVNfSmlFV1pNV0poSzV3S1otd0ZaZ2t0eUduWHhpdVNUcVJLQ3V4cUZFZWdaZEtxS0ZKZ1VVczdvVGlFQWxoTEE3d2dCbTJSRnFIVk9UVkdGYmFHNlhBbHdvWmxvbHJfT2xpbUtDQjBfd3pFWXhxUWN2WEdtZVhrVl9OZ1I3T3MzeUN5UHBCanAtYWxzZDE3bFo0WkR0RkJkZTQ3dWFB?oc=5" target="_blank">German institutes cut growth forecast as Iran war drives inflation higher</a>&nbsp;&nbsp;<font color="#6f6f6f">Reuters</font>

Germany's leading economic institutes have more than halved their 2026 economic growth forecast, slashing it to 0.6% from the 1.3% projected in September, as rising energy costs linked to the Iran war fuel inflation. The institutes also lowered their 2027 growth outlook to 0.9% from a prior estimate of 1.4%.

Eurozone annual inflation surged to 2.5% in March, up sharply from 1.9% in February, driven by a 4.9% increase in energy prices due to the Iran war and the near-total closure of the Strait of Hormuz. Economists are debating whether the European Central Bank will raise interest rates in response.

Germany's economic growth forecast for 2026 and 2027 has been significantly reduced due to the economic consequences of the ongoing Iran war, with GDP growth now projected at 0.6% for 2026 and 0.9% for 2027. The conflict has led to rising energy prices, particularly due to the disruption of the Strait of Hormuz, pushing eurozone inflation to 2.5% in March, up from 1.9%.