Germany's Federation of German Industries (BDI) has revised its economic outlook, now forecasting no growth in industrial production for 2026, downgrading from an initial 1% growth prediction. The change is driven by a sluggish start to the year and ongoing geopolitical issues, notably the Iran conflict, which may further dampen manufacturing output.

Although the BDI does not blame geopolitics as the root cause, it acknowledges that current international tensions exacerbate structural economic weaknesses within Germany. The industry body expressed concern about low capacity utilization rates and the risk of a fifth consecutive year of manufacturing decline if disruptions persist. Leaders are calling for swift government reforms to improve the country's business competitiveness and address internal economic challenges.