Berlin, May 16 (QNA) - The Federal Ministry for Economic Affairs and Energy of Germany forecast a clear slowdown in the German economy during the second quarter of this year amid rising prices, supply chain problems, and uncertainty linked to developments in the war in the Middle East and its impact on energy markets, raw materials, and international trade.
In its monthly report on the country's economy, the ministry said the German economy recorded real gross domestic product growth of 0.3 percent QoQ in the first quarter of the year. The growth was slightly stronger than expected, supported by private and government consumption as well as exports.
However, the ministry noted that current indicators point to a clear dampening of economic activity in the second quarter, noting that rising prices, supply chain disruptions, and uncertainty are weighing on business and household sentiment.
The ministry also said it expects continued high volatility in energy, raw materials, and financial markets over the coming months. It said that the future economic trajectory would depend on the duration of the conflict in the Middle East and the extent to which trade routes and production capacities are affected. It further projected that the effects of the crisis on energy prices, raw materials, and supply chains would persist even after any potential de-escalation.
Last month, the German government lowered its forecast for economic growth in 2026 to 0.5 percent, down from earlier expectations. It also projected growth of 0.9 percent in 2027, relying in part on major government investments in defense and infrastructure. (QNA)