The International Monetary Fund has lowered its growth forecast for the eurozone to 1.1% for 2026, down from an earlier estimate of 1.4%, citing the economic impact of the ongoing conflict involving Iran. The revision reflects weaker economic momentum across the euro area, driven by rising inflation and higher energy costs.
According to the IMF’s World Economic Outlook, disruptions in global energy supply—particularly around the Strait of Hormuz—have pushed inflation expectations higher and slowed recovery prospects.
The eurozone, which relies heavily on energy imports, is expected to face increased pressure from rising oil and gas prices, affecting industrial output and overall economic activity.
Pierre-Olivier Gourinchas said the current crisis has interrupted the global economy’s recent resilience, adding to downside risks.
The IMF also revised US growth projections to 2.3%, while Russia is expected to see modest gains supported by higher energy export revenues.
The fund warned that prolonged conflict and continued energy volatility could further weaken global growth and increase the risk of a broader economic slowdown.
