Bundesbank warns German inflation will stay elevated amid Iran conflict, slow growth
Germany's central bank cites energy costs and healthcare reforms for persistent inflation pressures.
What to know
- German inflation at 2.9% expected to persist due to energy costs tied to Iran conflict and upcoming healthcare reforms in 2027.
- Economy slowed over summer from weak exports, consumption, and droughts but central bank forecasts recovery in Q4.
- High living costs and slow growth are fueling political discontent with mainstream parties in Germany.
“However, this will also depend on how the conflict in the Middle East develops and how quickly water levels in important waterways normalise”
Bundesbank, German central bank · Reuters / Investing.com ↗ · Sep 20
Bundesbank German central bank
How it unfolded 2 developments, newest first · click a bar or a number to jump articlesposts
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Economic pressures fuel political discontent over living costs and weak growth
The Bundesbank noted that high living costs and weak economic growth have become increasingly important political issues, driving voter dissatisfaction with mainstream parties in Germany.
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background
Bundesbank reports economy lost momentum in summer, expects late-year recovery — The Bundesbank said Europe's largest economy grew only slightly in the current quarter, weighed down by weaker exports, consumption, and droughts. However, it expects recovery in the final three months of the year based on improved manufacturing outlook and continued fiscal and infrastructure support, contingent on Middle East conflict developments and waterway normalization.
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Bundesbank says German inflation will remain elevated, cites Iran conflict and reforms
In its monthly report, the Bundesbank stated that inflation at 2.9% in August would "remain elevated for the time being" due to high energy costs linked to the Iran conflict, low gas inventories, healthcare reforms due to start in 2027, and pharmacy supply rule changes. The central bank also warned that higher energy costs risk spreading to other parts of the economy.
“remain elevated for the time being…”
— Bundesbank -
first by Investing.com News, 5d ago
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