German Economy Defies Middle East War

Germany's GDP grew 0.3% in Q1 2026 driven by exports and public spending, but the outlook remains grim due to geopolitical conflict and high energy prices.

Key Takeaways

• 1.The German economy grew by 0.3% quarter-on-quarter in Q1 2026, its best performance since Q1 2025.
• 2.Growth was primarily driven by public consumption and net exports, the latter adding 1.3 percentage points to GDP.
• 3.The outlook for Q2 is negative due to high energy prices, supply chain frictions, and the impact of the Middle East war.

Table of Contents

• German economy defies Middle East war in first quarter
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