The growth rate of the European Union’s economy will slow down in 2026 after a new energy shock caused by the conflict in the Middle East.
According to the European Bureau of Report, this was stated by European Commissioner for Economics and Productivity Valdis Dombrovskis, presenting the EC spring forecast in Brussels.
According to Dombrovskis, the energy crisis has increased inflationary pressures and worsened business sentiment in the Union area.
“The conflict in the Middle East has caused a serious energy shock, becoming a new challenge for Europe in an already unstable geopolitical and trade environment,” he said.
According to the updated forecast, EU GDP growth will slow to 1.1% in 2026 from 1.5% in 2025 and the previously expected 1.4%. In 2027, the growth rate may accelerate to 1.4%. The forecast for the eurozone has also worsened: growth is expected to reach 0.9% in 2026 and 1.2% in 2027.
The European Commission has raised its inflation forecast in the EU to 3.1% in 2026, which is one percentage point higher than the autumn estimate. In 2027, the indicator may decrease to 2.4%.
In the eurozone, inflation is expected to reach 3.0% in 2026 and 2.3% in 2027. The price increase is primarily due to the rise in energy prices after the surge in quotations on world markets.
According to the EC, the budget deficit in the EU countries will grow from 3.1% of GDP in 2025 to 3.6% of GDP by 2027 against the background of weaker economic growth, increased spending on household and business support, as well as increased defense spending.
