EU faces stagflation risk from Iran conflict energy surge

The European Union economy is facing a heightened risk of stagflation due to surging energy prices triggered by the conflict between the United States, Israel, and Iran. European Economic Commissioner Valdis Dombrovskis warned that the economic outlook is increasingly uncertain following a meeting with finance ministers in Brussels.

The outlook is clouded by profound uncertainty, but it is clear that we are at the risk of a stagflationary shock, that is to say, a situation where a slower growth coincides with a higher inflation.