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Germany's economy is expected to face a recession in the third quarter of 2026, with zero growth anticipated due to rising energy costs and weak industrial activity, particularly in the automotive sector. The low water levels in the Rhine River have increased shipping costs and negatively impacted foreign trade. Inflation rose to 3.3% in September, driven by higher energy prices and conflicts in the Middle East. Additionally, the Ifo Institute warns that the focus of research investments on traditional industries diminishes Germany's competitiveness, as advanced technology sectors account for only about 20% of research spending—compared to 68% in the United States—limiting future growth and increasing inflationary pressures.
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