German Economy Faces Uncertain Future Amid Global Tensions
A potential conflict between Israel and Iran threatens the German economy by possibly driving up oil prices, warns DIW Berlin. Despite this, Germany's economy is projected to grow by 0.3% this year due to government investment and improved financing. However, U.S. trade policies continue to pose challenges.
A potential escalation in tensions between Israel and Iran could have ripple effects on the German economy, particularly if it results in rising oil prices, according to the German economic institute DIW Berlin. Germany remains unique among the G7 nations for experiencing zero economic growth in recent years, impacting both business and consumer confidence.
DIW chief economist Geraldine Dany-Knedlik highlighted that any noticeable surge in oil prices could further pressure the economy at an inopportune moment. High oil and energy costs significantly influence private consumption, as everyday prices for gasoline and diesel weigh heavily on household budgets.
The prospect of Germany's economy growing by just 0.3% this year follows a dynamic start with a 0.4% growth in the first quarter. A government investment package aims to boost the economy, as the country edges toward recovery. However, U.S. trade policies remain a growing concern.
(With inputs from agencies.)
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