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Commerzbank warns high energy prices cap Germany growth in 2026

The bank expects full year growth of just 0.6% and links potential recovery to an easing of US-Iran tensions and a permanently reopened Strait of Hormuz.

Reported · Written up by our desk · Central Banks

Commerzbank economist Dr. Jörg Krämer said high energy prices are likely to continue weighing on the German economy in the second half of 2026, constraining the outlook for full year growth to 0.6%, according to FXStreet.

Krämer pointed to a sharp rise in Germany’s Ifo business climate reading to 86.6 from 85.7, but said the improvement was partly recorded before a recent oil price surge, limiting how much it can be taken as evidence of a broad rebound.

He added that the stronger Ifo reading could still signal recovery potential if US and Iran reach an agreement and the Strait of Hormuz is permanently reopened, though he cautioned that a lasting deal is likely to be drawn out.

Krämer also noted that companies typically respond to the Ifo survey by mid month, so many firms would not have been able to adjust their assessments after the more recent jump in oil prices, while Brent crude was said to be around 90 dollars and down by about 10 dollars versus the prior day, FXStreet reported.

Latest closeWTI crude $90.47 ▼1.9%|Brent $98.38 ▼2.3%

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