(Germany, 22nd) The EU released its European Economic Spring Outlook Report on the 21st, stating that, impacted by U.S. and Israeli military strikes on Iran, EU energy prices have soared and inflation rates have continued to rise. As a result, the EU has revised down the economic growth forecasts for this year and next for both the EU and the Eurozone.
On that day, the European Commission customarily released the European Economic Spring Outlook Report, predicting that the EU and Eurozone economies will grow by 1.1% and 0.9% respectively in 2026, and by 1.4% and 1.2% respectively in 2027.
Compared with the European Economic Autumn Outlook Report published in November last year, the 2026 EU economic growth forecast has been revised down from 1.4% to 1.1%, and the Eurozone economic growth forecast has been revised down from 1.2% to 0.9%. The 2027 EU economic growth forecast has been revised down from 1.5% to 1.4%, and the Eurozone economic growth forecast has been revised down from 1.4% to 1.2%.
In terms of inflation, the report predicts that the average inflation rate for the EU and Eurozone in 2026 will be 3.1% and 3%, up by 1% and 1.1% respectively compared to the European Economic Autumn Outlook Report. In 2027, the average inflation rate for the EU and Eurozone is expected to be 2.4% and 2.3%, up by 0.2% and 0.3% respectively.
The report states that after U.S. and Israeli military strikes on Iran in February this year, as a net importer of energy, the EU saw energy prices soar, causing household electricity and gas bills to skyrocket and business costs to surge, which in turn squeezed the profits of multiple industries and dealt a heavy blow to consumer confidence.
In addition, affected by tighter financing conditions, declining industry profits, increasing external uncertainties, and other factors, EU corporate investment is currently being suppressed. Due to weak external demand, EU export growth is also under pressure.
Dombrovskis, the European Commissioner for Economic Affairs, stated in the report that as the EU faces geopolitical tensions and a turbulent trade environment, the Middle East conflict has triggered a huge energy shock, further testing the EU economy. He called for the EU to learn lessons, accelerate transformation, and reduce dependence on imported fossil fuels.