Berlin: German Finance Minister Lars Klingbeil stated that 'the irresponsible war of U.S. President Donald Trump, and the resulting shock in global energy prices, are temporarily slowing positive economic momentum.'
According to Yemen News Agency, Klingbeil added in a statement that these forecasts demonstrate the scale of the economic damage caused by the war in Iran. Germany's Council of Tax Experts has lowered its forecast for tax revenues between 2026 and 2030 by around £87.5 billion compared to last October's estimates. This reduction increases pressure on the German government amid the financial deficit and rising energy and defense costs resulting from the repercussions of the war in Iran.
This downgrade in fiscal expectations comes one week after the German government approved the main targets of the 2027 budget. The budget already includes new borrowing worth £196.5 billion, an increase in defense spending to 3.1 percent of gross domestic product, and record investments in transportation, digitalization, and hospitals.