industry group growth forecast

Berlin — Germany’s economy is now expected to grow by just 0.4% this year, with the Federation of German Industries (BDI) citing the war in Iran as one of the main reasons for its weaker outlook.

At the beginning of the year, the industry association had forecast economic growth of 1% for 2026.

Growth is currently being driven primarily by public investment, BDI Chief Executive Tanja Gönner said.

She added that the revised forecast already takes into account the recently signed memorandum of understanding between the US and Iran, aimed at reaching a comprehensive end to the conflict within 60 days.

“Nevertheless, the economic fallout from the war in Iran is still being felt,” Gönner said.