Germany first-quarter GDP data due as war weighs on outlook

Germany is set to release an initial estimate of gross domestic product (GDP) on Thursday, with economists expecting at best marginal growth in the first quarter as the fallout from the Iran war hits Europe’s largest economy.

The data from the Federal Statistical Office, due at 10 am (0800 GMT), comes against a backdrop of rising energy prices, fragile supply chains and uncertain export markets, all of which are weighing on activity. 

Economists and the German government expect the economy to grapple with the consequences of the Middle East conflict for some time. Higher energy costs — particularly at fuel pumps — are burdening consumers and businesses alike, dampening consumption and investment.

Business sentiment has deteriorated, with the Ifo Business Climate Index falling sharply in April.

Economists have repeatedly downgraded their forecasts for the year. Leading economic institutes now expect Germany’s economy to grow by just 0.6% in 2026.

The government is even more pessimistic, projecting growth of 0.5%. Before the Iran conflict, many analysts had anticipated growth of around 1% or more.

In 2025, Germany narrowly avoided a third consecutive year without growth, posting a modest expansion of 0.2%. A strong year-end performance helped: GDP rose by 0.3% quarter-on-quarter in the fourth quarter, marking the best quarter for the German economy in three years.