Azernews.Az

By Alimat Aliyeva

Germany has warned that a potential blockade of the Strait of Hormuz, along with an escalating conflict involving Iran, could have a significant negative impact on the country’s economy, AzerNEWS reports.

In its latest monthly report, the German Federal Ministry for Economic Affairs and Climate Action noted that current indicators suggest a noticeable slowdown in economic growth for the second quarter of the year. Rising prices, supply chain disruptions, and geopolitical uncertainty are increasingly weighing on both business confidence and consumer sentiment.

The industrial sector remains particularly fragile. Although recent data shows a temporary increase in orders, officials say this is largely due to contracts placed before the escalation of tensions in the Iran–Iraq region, rather than signs of a genuine recovery. The report also warns that no meaningful economic rebound is expected during the summer months.

Inflation rose to 2.9% in April, reaching its highest level since January 2024. Higher energy costs are seen as a key driver of this trend, and they are also dampening household confidence, which is expected to lead to weaker consumer spending in the second quarter.

Economists note that Europe’s largest economy is especially sensitive to disruptions in global energy routes such as the Strait of Hormuz, through which a significant share of the world’s oil shipments pass. Any prolonged instability in the Middle East could therefore quickly translate into higher fuel prices and renewed inflationary pressure across Europe.

At the same time, analysts point out a broader structural challenge: Germany’s ongoing industrial transition. The country’s export-oriented manufacturing sector is already under pressure from global competition, particularly in automotive and machinery industries, making it more vulnerable to external shocks.

According to government assessments, the future trajectory of the economy will depend heavily on how long the regional conflict persists, and whether global trade routes and energy infrastructure remain stable in the coming months.