EU Cuts 2026 Growth Forecast as Energy Prices Rise
The European Commission expects euro zone growth to slow to 0.9% in 2026 after a surge in oil prices triggered a second energy shock. Inflation forecasts were raised to 3.0% for next year, increasing the likelihood of higher interest rates and worsening public deficits across the region.
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The European Commission predicts euro zone GDP growth will slow to 0.9% in 2026 as Middle East conflict drives energy prices higher. This forecast cuts the previous 1.2% growth estimate issued in November. Investors face a regime of higher interest rates and weakened consumer sentiment as energy shocks disrupt the bloc's recovery.
