BERLIN, March 12 (Reuters) - Germany's IfW institute slightly lowered its 2026 economic forecast on Thursday based on expectations that commodity prices driven higher by the war in Iran will remain
Germany's IfW Cuts 2026 Growth Outlook Amid Soaring Commodity Prices
IfW Institute Revises Economic Forecasts Due to Geopolitical Tensions
Impact of Iran Conflict on Commodity Prices
BERLIN, March 12 (Reuters) - Germany's IfW institute slightly lowered its 2026 economic forecast on Thursday based on expectations that commodity prices driven higher by the war in Iran will remain significantly elevated for only a few months.
"New headwinds threaten from the military conflict in Iran, which has noticeably driven up commodity prices," said the institute.
Consequences for Germany's GDP
In this scenario, a loss of purchasing power amounting to 0.6% of annual gross domestic product is projected for the current year, which will noticeably dampen economic activity but not cause it to collapse, said the Kiel-based institute.
As a result, GDP is now expected to grow by 0.8% this year, 0.2 percentage points less than what IfW had predicted in its winter forecast.
Long-Term Economic Recovery
The economy will slowly regain its footing over the course of the year, said the institute, which raised its growth forecast for next year to 1.4% from 1.3% previously.
Inflation Projections
Inflation this year, driven by higher energy prices, will rise significantly more sharply than expected in winter, reaching 2.5%, IfW said, which previously predicted 1.8%.
The inflation forecast for 2027 remained unchanged at 2.1%.
(Reporting by Miranda Murray, editing by Thomas Seythal)
