Economic Buzz: EU cuts its growth outlook and predicts higher inflation due to sharply higher energy prices from the war in Iran

The European Union's executive commission cut its growth outlook and predicted higher inflation due to sharply higher energy prices from the war in Iran ? but said the economy will avoid an outright recession. ?As a net energy importer, the EU's economy is highly susceptible to the energy shock caused by the conflict in the Middle East,? the commission said in a statement Thursday. The rising cost of fuel means higher household bills and surging business costs that reduce profits for many industries?. After reaching 1.5% in 2025, EU GDP growth is now projected to slow down to 1.1% this year?0.3 pps, lower than in the Autumn 2025 Forecast?while inflation is expected to rise to 3.1%, an upward revision of a full percentage point compared to the Autumn 2025 Forecast. Global growth (excluding the EU) is now projected at 3.1% in 2026 and 3.5% in 2027.

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