The German Economic Institute (IW) said on Thursday that the German economy could face losses totaling 40 billion euros ($46.4 billion) over the next two years due to rising oil prices caused by the escalating Israeli-American-Iranian war.
The institute indicated that a rise in Brent crude prices to $100 per barrel could cost Germany about 0.3% of its Gross Domestic Product in 2026 and 0.6% in 2027, stating that this would represent a loss in economic output amounting to about 40 billion euros over two years.
The institute said that if oil prices were to rise to $150 per barrel, it could result in a 0.5% and 1.3% decrease in Germany's Gross Domestic Product in 2026 and 2027, respectively, leading to a loss of more than 80 billion euros.
Despite the decline in actual trade with Iran over the past years, the institute believes that Germany remains vulnerable to the repercussions of rising energy prices and imports, and describes the ongoing conflict in the Middle East as posing "serious repercussions" on the country's economic growth and future development.
