Germany in April 2026: the most important developments in economy
Germany's economy in April 2026 was shaped by the energy price shock from the Iran war and the crisis around the Strait of Hormuz. The Ifo Institute said the conflict could affect 90 percent of German industry, and the government halved its 2026 growth forecast to 0.5 percent. Inflation rose to 2.9 percent in April, a multiyear high. On 22 April Berlin said Russia would stop Kazakh oil flows to the Schwedt refinery via the Druzhba pipeline; by 28 April Kazakhstan had changed its export route to Germany, bypassing Druzhba.
Chancellor Friedrich Merz announced a fuel tax cut worth about $1.9 billion in mid-April, and parliament approved a fuel discount and relief bonus on 24 April. The SPD demanded a windfall tax on oil companies, and SPD politician Miersch warned that new debt may become necessary, while Merz opposed higher EU debt. At the Hannover Fair on 20 April, Merz pledged secure fuel supplies, proposed exempting industrial AI from some EU rules; his coalition partner opposed the AI proposal.
Air travel was hit by fuel costs and labour disputes. Lufthansa reached a wage deal with the Verdi union for a new subsidiary, but its pilots' union called further strikes. The airline cut 20,000 flights, shut its CityLine unit and grounded some aircraft, while Ryanair announced it would close its Berlin operations centre and halve its flights there. Merz convened a security council over fears of a kerosene shortage, and a minister warned against alarmism.
Carmakers and industrial groups reported weaker results. Bosch posted its first annual loss since 2009. Mercedes-Benz first-quarter sales fell 6 percent, mainly in China, and its profit dropped. Volkswagen said it would cut capacity by another one million cars and lowered its expectations for China. Siemens said it would prioritise AI investment in the US and China over Europe, and Mercedes signed a $6.7 billion battery supply deal with Samsung SDI. SAP shares rose on cloud growth, Deutsche Telekom was reported to be considering a merger with T-Mobile US.
by WorldBrief & Maksim Micheliov | AI-generated summary
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