Overview
- The economy ministry, in a monthly report released Friday, said current indicators point to a significant setback in the April–June quarter tied to higher energy and commodity prices, new supply bottlenecks, and heightened uncertainty from the Iran war.
- Inflation rose to 2.9% in April, the highest since January 2024, which is squeezing household budgets even as a temporary fuel tax cut through June offers some relief at the pump.
- Residential construction confidence deteriorated sharply in April as the ifo index fell from minus 19.3 to minus 28.4, with 9.2% of firms reporting material shortages concentrated in basic inputs such as steel, concrete, insulation, and oil-based products.
- Energy‑intensive industries such as chemicals, paper, glass, and metals have cut output by 15.2% since February 2022, and payrolls in these sectors were down about 53,200 jobs by March 2026, underscoring where higher power and feedstock costs hit hardest.
- Germany’s GDP still grew 0.3% in the first quarter, while a 5% jump in March orders likely reflected firms stocking up ahead of price rises and delivery risks, and the outlook now hinges on how long conflict and trade disruptions around the Strait of Hormuz persist.