Germany’s BDI Lowers 2026 Growth Outlook, Stresses Need for Economic Reforms
BDI’s Revised Economic Forecast and Calls for Reform
By Maria Martinez
BERLIN, June 22 (Reuters) - Germany's industry association BDI sharply lowered its growth outlook for 2026 on Monday and warned that the country's industrial base remains under severe pressure from high costs, weak investment conditions and geopolitical risks.
Current Economic Outlook
The BDI expects the German economy to grow by only 0.4% this year, down from a 1% forecast made in January.
Industry Sentiment
BDI President Peter Leibinger said the situation in German industry was "critical, but not hopeless," arguing that the government must act more decisively to restore competitiveness.
Factors Impacting Growth
According to the BDI, conditions have worsened in recent months, particularly because of the Iran war and its impact on energy prices and supply chains.
Key Challenges
High energy prices, high taxes, high unit labour costs, high non-wage labour costs, and excessive bureaucracy are burdening Germany as a business location, Leibinger said.
BDI’s Reform Proposals
The BDI called for a broad reform package rather than isolated measures, urging lower corporate taxes, improved depreciation rules, stronger innovation incentives, faster planning and approval procedures, and a more efficient public administration.
Urgency for Policymakers
Leibinger’s Statement
"Policymakers must deliver — consistently, reliably, and with priority given to growth," Leibinger said. "That is how investment, growth, and a new beginning will emerge."
(Reporting by Maria MartinezEditing by Linda Pasquini)
