According to the Dresden-based Ifo Institute, the effects of the war in Iran are putting a damper on the East German economy. In their summer forecast, the researchers predict that the recovery will be noticeably slowed by rising energy prices. Economic output in eastern Germany is forecast to grow by 0.7 percent this year and by 0.8 percent next year.
“The outlook isn’t particularly rosy,” said Joachim Ragnitz, deputy director of the Ifo Institute in Dresden. According to the report, the strong positive effects of tax policy are offset by a negative environment characterized by U.S. tariffs, the war in Iran, and ongoing structural upheavals in the local economy.
