German economy has defied the Gulf crisis so far

The global inflation wave stemming from the Persian Gulf crisis has reached Germany, but there has been little effect on economic activity so far. CEIC’s high-frequency indicators are monitoring Europe’s largest economy in near-real time; they suggest that March economic figures (and, hence, first-quarter data yet to be reported, such as industrial production and GDP) stayed surprisingly resilient.

Our first chart tracks the composite weekly real activity index from the Bundesbank. It barely slowed over March or April; 2026 has been notable for the stability of this indicator when compared to previous years.

Our second and third charts consider the pillars of the German economy: the auto sector and proxies for manufacturing activity more broadly. Truck toll mileage (a real‑time gauge of logistics) showed no visible sign of disruption in March, suggesting that energy prices had yet to disrupt industrial operations. German drivers were also buying more cars; the registration of new vehicles picked up to the fastest growth rate in almost two years.

The most pessimistic data so far is coming from sentiment surveys. The Ifo business climate survey showed a clear deterioration in expectations. And consumer sentiment indicators from various sources also declined markedly in March, reversing earlier improvements. But in both cases, respondents said their current situation is comparatively stable despite worries about the future.

Consumer spending picked up — even in March, and for both goods and services — after the usual post-Christmas lull, as we can see from Fable’s high-frequency card spending data.

Finally, we turn to aviation, which also saw demand hold up through March. But Lufthansa, concerned about jet-fuel shortages, cancelled many flights in April.

How to explain the lagged impact of war on real economic activity? Energy inventories may have been robust enough to allow firms to absorb higher prices without immediately cutting production. Households might have brought their spending forward in anticipation of higher prices, especially for big-ticket purchases such as cars. And finally, after years of underperformance — especially in Germany — Europe’s economy may have less cyclicality left to be battered by new shocks.