The DIHK now expects Germany's gross domestic product (GDP) to grow by just 0.3 percent in 2026, according to its latest projection reported by Welt am Sonntag. At the turn of the year, the chamber had still forecast growth of 1.0 percent, meaning the outlook has been cut by more than two-thirds.
The DIHK's revised forecast broadly aligns with that of the German Economic Institute (IW), which in early May lowered its own 2026 projection from 0.9 percent to 0.4 percent. Germany's leading economic research institutes had already halved their joint forecast to 0.6 percent in their spring report in early April. All pointed to surging energy prices triggered by the Iran conflict as the key driver.
A recent DIHK business survey paints a grim picture of corporate confidence. According to Bild am Sonntag, 26 percent of companies rated current economic conditions as poor, a level last seen during the COVID-19 pandemic. The outlook is equally bleak: only 13 percent of firms expect business to improve over the next twelve months, while a full third anticipate a decline.
DIHK Managing Director Helena Melnikov warned that the conflict has derailed a fragile recovery. "Just as the first glimmers of economic hope appeared on the horizon, the Middle East war has cast yet another shadow over Germany's already weakened economy," she told the newspaper. "A sustainable recovery is now a distant prospect."
Even before the conflict, Melnikov noted, German businesses were under severe strain from high labor costs, elevated energy prices, excessive bureaucracy, and a heavy tax burden. "The recent surge in energy and commodity prices is the straw that breaks the camel's back for many companies," she said. According to the survey, 70 percent of firms now rank rising energy and raw material costs as their single greatest business risk.
The DIHK survey was conducted between March 23 and May 8, collecting 23,416 responses from companies across Germany.
From breaking news to thought-provoking opinion pieces, our newsletter keeps you informed & engaged.
