EU Spring 2026 Economic Forecast: GDP growth forecast at 1.1% for EU, inflation at 3.1% due to Middle East conflict energy shock (economy-finance.ec.europa.eu)

• EU GDP growth forecast revised down to 1.1% in 2026, inflation up to 3.1% due to Middle East-triggered energy shock; Strait of Hormuz disruption cuts oil/LNG flows.
• Oil prices up 65%, gas prices up 50% since late February; refining margins at historic highs for diesel and jet fuel.
• EU deficit widens to -3.5% of GDP in 2026, debt ratio rises to 85.3% by 2027; ECB expected to tighten monetary policy.

"The EU Commission's Spring 2026 Economic Forecast projects EU GDP growth slowing to 1.1% in 2026 (down 0.3 pps from autumn forecast) and inflation rising to 3.1% (up 1 pp), driven by the Middle East conflict's disruption of the Strait of Hormuz, cutting seaborne oil and LNG flows by 15% and 20% respectively. Oil prices surged 65% and gas prices 50% since late February. The EU deficit is forecast to widen to -3.5% of GDP in 2026 and -3.6% in 2027, while unemployment stabilizes around 6%. ECB is expected to tighten monetary policy."