German industry association BDI cuts 2026 growth forecast, urges reforms

By Maria Martinez

BERLIN, ‌June 22 (Reuters) - ​Germany's ​industry association BDI sharply lowered its growth outlook for 2026 on Monday ‌and warned that the country's industrial base ⁠remains under severe pressure from high costs, weak investment ‌conditions and geopolitical risks.

The ‌BDI expects the German economy to grow by only 0.4% this year, down from a ​1% forecast made in January.

BDI President Peter Leibinger said the situation in German industry ⁠was "critical, but not hopeless," arguing that the government must act ​more decisively to restore competitiveness.

According to the BDI, conditions have worsened in recent ​months, particularly because of the ‌Iran war and its impact on energy prices and supply chains.

High energy ⁠prices, high taxes, high unit labour costs, high non-wage labour costs, and excessive bureaucracy are burdening ⁠Germany as a business location, Leibinger said.

The BDI called ​for a broad reform package rather than isolated measures, urging lower corporate taxes, improved depreciation rules, stronger innovation ‌incentives, faster planning and approval procedures, and a more efficient public administration.

"Policymakers ‌must deliver — consistently, reliably, and with priority given ⁠to growth," Leibinger ‌said. "That is how ​investment, growth, and a new beginning will emerge."

(Reporting by Maria MartinezEditing by Linda ‌Pasquini)

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