The change in the global world order and economic system isn’t a temporary phenomenon. Globalisation and digitalisation mean this change will be a perpetual process, First Deputy Governor Sabine Mauderer announced at a symposium organised by the Institute for Banking and Financial History (IBF) and the Center for Financial Studies (CFS). Hosted by the Bundesbank’s Regional Office in Hesse, this event saw participants discuss how trade conflicts can impact on the global economic system. Bundesbank Executive Board member Fritzi Köhler-Geib spoke on a panel about the outlook for the German and European economy.

In spite of ongoing strains and additional headwinds as a result of the war in the Middle East, real gross domestic product (GDP) is likely to have increased slightly in the first quarter of 2026 after seasonal adjustment, says the Bundesbank in its April Monthly Report. Nonetheless, industry is suffering from structural barriers to growth, which are undermining its competitive position. Furthermore, the significant rise in fuel prices in March has weighed heavily on households’ purchasing power. The Bundesbank’s experts anticipate that inflation will remain significantly elevated over the coming months as well.

The global economy is under pressure: the pandemic, the war in Ukraine and the conflicts in the Middle East have heightened geopolitical tensions. Germany, a large open economy with a gross international investment position of over €14 trillion, is particularly affected by this. In the current edition of the Monthly Report, our experts analyse changes in Germany’s external assets against the backdrop of the current geopolitical situation.

“World events are keeping us on tenterhooks,” said Bundesbank President Joachim Nagel at a joint press conference with Federal Finance Minister Lars Klingbeil on the sidelines of the IMF/World Bank Spring Meetings, speaking about challenges facing the German economy and monetary policy. Nagel noted that the situation in the Middle East was, in many respects, a new test of hardship.