International Monetary Fund Forecasts Slower Euro Zone Growth and Rising Inflation Amid Energy Risks
- brg_news_room
- 7 days ago
- 1 min read
Europe: The International Monetary Fund stated that Eurozone growth is expected to slow to 1.1% in 2026 from 1.4% in 2025, below the earlier 1.3% estimate, due to the impact of the Iran war and persistently high energy costs, while inflation is projected to rise to 2.6% from 2.1%. The region’s heavy reliance on energy imports, compounded by the effects of the Russia-Ukraine War, continues to strain resources and manufacturing. In response, the European Central Bank is expected to raise its 2% deposit rate by 50 basis points in 2026, with markets already pricing in a hike by June. While increased defence spending may provide some support, the IMF warned that risks remain elevated with potential for weaker growth and higher inflation under adverse scenarios.
Source: Reuters
