AssetID: 55717935
Headline: UNCAPTIONED: EU Warns Middle East Conflict Could Stall Eurozone Recovery in 2026
Caption: EU Warns Middle East Conflict Could Stall Eurozone Recovery in 2026. The European Commission has warned that the eurozone economy is set to slow sharply in 2026 as the conflict in the Middle East pushes energy prices higher and revives inflationary pressures. Growth in the single-currency bloc is now forecast at 0.9% next year, while inflation is expected to climb back to around 3%, according to Economy Commissioner Valdis Dombrovskis. Rising oil prices linked to disruptions around the Strait of Hormuz are increasing costs for businesses and households, weakening consumer confidence and industrial activity. The ECB is widely expected to respond with new interest-rate increases in June, despite fears that tighter borrowing conditions could deepen the slowdown. Policymakers say the duration of the conflict will determine whether Europe faces a temporary shock or a longer period of weak growth. Surveys already show eurozone business activity contracting at its fastest pace in more than two years, with Germany and France among the hardest-hit economies. Spain may prove somewhat more resilient than several northern European economies because of its expanding renewable-energy sector and lower dependence on imported gas. However, higher fuel and transport costs would still weigh on Spanish tourism, household spending and public finances, especially during the busy summer season. Instructions: THIS VIDEO MUST NOT BE EDITED FOR LENGTH TO COMBINE WITH OTHER CONTENT
Keywords: Current Affairs & Politics,Eurozone,forecast,down,Spain,France,Germany,energy prices,inflation,ECB,European Commission,Valdis Dombovskis,stall,war,Iran,Strait of Hormuz,tourism,households,borrowing costs
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