National Bank: Iran war likely to destroy economic recovery in 2026

And yet, the National Bank presented scenarios on Tuesday that suggest a rise in inflation and a setback for the Economic growth of all things in a year in which the economy, which had started tentatively in 2025, should have finally solidified into a real recovery.

Shortly before Christmas, Wifo and IHS published the latest available forecasts for Austria’s economy in 2026. One percent economic growth was expected.

Now the National Bank expects – depending on the scenario – a damper of between 0.5 and one percentage point on growth this year. This means that in the event of a prolonged conflict, this year at best the economy would be in the black and inflation would rise by a full percentage point. This assumes an average oil price over the year 2026 of 100 dollars per barrel and 70 euros per MWh for gas.

Kocher can imagine the many countermeasures being discussed, such as reducing the VAT on petrol and diesel, but does not want to commit to a specific model. When asked how the ECB will react to rising inflation, he also referred to the upcoming meeting next week. “We have to react carefully and not hastily. The ECB can react at any time and that is the right approach in this uncertain situation.”