Energy Costs and Higher Rates Deepen Global Economic Strains

Higher energy prices and borrowing costs are weighing on economies worldwide, while the IMF expects global growth to slow to 3.1% in 2026 from 3.5% in 2025. In Germany, rising fuel and heating costs are adding pressure on households and businesses ahead of winter.

A Wall Street Journal assessment reported by Dünya says countries with limited gains from investment in artificial intelligence are struggling more to offset the financial effects of high costs. The report points to protests in France, the Philippines and Indonesia, as well as Senegal’s September request for debt relief from international bondholders and Chinese state-owned banks.

Germany’s winter cost squeeze

German petrol prices rose about 30% over a year and diesel about 45%, tagesschau reported. Energy prices were up 14.9% year over year in September, while the inflation rate stood at 3.3%.

Heating oil rose about 80% over the year, and wholesale gas prices nearly 128%, the report said. It also reported that German gas storage levels at the start of October were lower than ever for that point in the year. Some households have delayed refilling heating-oil tanks or ordered smaller amounts.

Higher fuel bills are also squeezing businesses. A freight company owner near Schweinfurt said fuel alone had added €1 million in annual costs compared with 2020. The industry association warned that logistics firms were facing falling liquidity, postponed investment and smaller fleets.

A fuel-price cap is planned from January. Andrej Putisek of Stuttgart University of Applied Sciences warned that a cap could increase demand and reduce supply, raising the risk of shortages.

Uneven pressure across economies

Dünya reported that Capital Economics economist Thomas Ryan linked an August rise in Canadian manufacturing sales to prices, not higher sales volumes. He said new US tariffs were weighing on the sector and added downside risk to an early estimate that Canada’s economy grew 0.2% that month.

BBVA economists expect Spain’s growth to ease from 2.6% in 2026 to 2.1% in 2027, citing high energy prices, inflation and interest rates. They forecast Catalonia growing faster than the Madrid region in 2027, with exports of goods supporting Catalonia’s expansion.