Iran’s economy could lose as much as 40 billion euros ($46.4 billion) over the next two years from the Iran war, as soaring oil prices threaten to hamper economic recovery, the German Institute for Economic Research (IW) said in a forecast released today.
The institute said that although actual trade with Iran has been declining for years, Germany, which is dependent on energy prices and imports, remains exposed to the effects of the situation, highlighting the expected rise in oil prices.
“The escalating conflicts in the Middle East are having a serious impact on economic development,” he said.
output loss
Al-Ahed suggested that if Brent oil prices rise to $100 per barrel, the German economy could suffer losses of 0.3% of GDP in 2026 and 0.6% in 2027.
He added: “This would mean a loss of economic output worth around 40 billion euros over two years, and if oil prices rose to $150 per barrel, Germany’s GDP could be reduced by 0.5 percentage points and 1.3 percentage points in 2026 and 2027, respectively, leading to losses of more than 80 billion euros.”
The Iran war could cost the country’s economy 40 billion euros ($46.4 billion) over the next two years, the German Institute for Economic Research (IW) said in a forecast released today, as rising oil prices threaten to derail economic recovery.
The institute said that while actual trade with Iran has been declining for years, Germany, which is dependent on energy prices and imports, remains exposed to the effects of the situation, highlighting the expected rise in oil prices.
“The escalating conflicts in the Middle East are having a serious impact on economic development,” he said.
output loss
The institute said that if Brent oil prices rise to $100 per barrel, the German economy could suffer losses of 0.3% of GDP in 2026 and 0.6% in 2027.
It added: “This corresponds to a loss of economic output of around 40 billion euros over two years, and if oil prices rise to $150 per barrel, Germany’s GDP could decline by 0.5 percentage points and 1.3 percentage points in 2026 and 2027, respectively, resulting in losses of more than 80 billion euros.”
