{"id":14729,"date":"2026-04-15T09:45:09","date_gmt":"2026-04-15T09:45:09","guid":{"rendered":"https:\/\/www.europesays.com\/europe\/14729\/"},"modified":"2026-04-15T09:45:09","modified_gmt":"2026-04-15T09:45:09","slug":"euro-zone-economy-close-to-stalling-as-war-takes-its-toll-2","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/europe\/14729\/","title":{"rendered":"Euro zone economy close to stalling as war takes its toll"},"content":{"rendered":"

PMI tumbles to 10-month low on fallout from warPrice, delivery times take huge hitsGermany holds up better than FranceConsumer confidence also hitLONDON\/FRANKFURT, March 24 (Reuters) – Euro zone private sector growth nearly stalled this month as inflation \u200bexpectations surged and delivery times soared, adding to mounting evidence that the bloc is already suffering a tangible drag from \u200cthe U.S. and Israeli war with Iran<\/a>.<\/p>\n

With oil prices up by two-thirds since the start of the year as a key transport corridor is shut, euro zone inflation is already rising and economic growth is taking a hit. Expensive fuel saps household purchasing power, lowers corporate profit margins and hits confidence.<\/p>\n

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The S&P Global flash euro zone Composite Purchasing Managers’ Index fell to a 10-month low \u200bof 50.5 in March from 51.9 in February, as the war drove input costs to their highest in more than three years and \u200btriggered the worst supply chain disruptions since mid-2022.<\/p>\n

Underlying figures saw much bigger changes. The index for manufacturing prices jumped to \u206068.6 from 58.0 while the delivery times index plunged to 40.9 from 47.3, suggesting that firms anticipate massive delays and a surge in prices.<\/p>\n

A host \u200bof euro zone nations, including Austria, Finland, opens new tab<\/a> and Portugal, all separately predicted lower economic growth ahead, partly because of dearer energy.<\/p>\n

This is still not expected to push the \u200bbloc into recession but growth is already at only around 1%, indicating there is little buffer left, economists say.<\/p>\n

“The flash euro zone PMI is ringing stagflation alarm bells as the war in the Middle East drives prices sharply higher while stifling growth,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said.<\/p>\n

German figures held up relatively well, with \u200bother major economies taking a bigger hit, including France<\/a>, where business confidence tumbled.\"ThyssenKruppA ThyssenKrupp steel factory in Duisburg, Germany, November 5, 2025. REUTERS\/Leon Kuegeler\/File Photo Purchase Licensing Rights, opens new tab<\/a>Separate data a day earlier showed consumer confidence<\/a> in the bloc falling to its \u200blowest level since late 2023 in one of the biggest falls on record, tumbling deep below its long-term average as the economic pain takes its toll on households.<\/p>\n

Even before \u200cthe war, \u2060according to trade data released last week, European exports fell sharply at the start of 2026, buffeted by U.S. President Donald Trump’s erratic tariff announcements. EU exports to the United States fell 27.8% year-on-year in January, with a 4.7% drop in exports to China, and falls of 1.5% and 10.2% to the UK and Japan respectively.<\/p>\n

RATES RISE, DISPOSABLE INCOME HIT<\/p>\n

“The survey points to a large near-term inflation impact from higher energy that could feed into core prices,” JP Morgan’s Raphael \u200bBrun-Aguerre said. “The energy price shock could \u200bhit business profitability and has already \u2060damaged demand conditions and output more broadly in the region.”<\/p>\n

Interest rates are rising as banks anticipate hikes from the European Central Bank to curb inflation, and this has already pushed some mortgage rates higher to dent disposable incomes.<\/p>\n

Meanwhile \u200bpetrol prices have risen by more than 10% across the EU and diesel is up over 20%. Even \u200bif the war ends relatively soon, \u2060these prices are unlikely to fall quickly as some energy infrastructure is damaged and fuel bottlenecks may take several months to resolve.<\/p>\n

This is why the ECB already said that inflation, at its 2% target for the past year, will surge to at least 2.6% under its more benign scenario. Risks are skewed to \u2060much higher readings.<\/p>\n

“The \u200beuro zone’s vulnerabilities are once again laid bare,” ING economist Bert Colijn said. “For energy-intensive industry, \u200bthis means that a recovery will be harder to achieve, which matters significantly for overall production.”<\/p>\n

Central banks normally look past such energy-driven inflation shocks but markets are betting on quick rate \u200bhikes this time, not least because a similar shock in 2021\/22 proved to be lasting and central banks reacted late.<\/p>\n

Reporting by Balazs Koranyi
\nEditing by Peter Graff<\/p>\n

Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n

Purchase Licensing Rights<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"PMI tumbles to 10-month low on fallout from warPrice, delivery times take huge hitsGermany holds up better than…\n","protected":false},"author":2,"featured_media":14730,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2480],"tags":[11318,11321,11327,3433,8827,11329,3449,11340,3454,11339,11331,3458,11344,3452,11351,3456,11334,11347,11341,11332,3451,11345,11343,3463,11349,3464,3460,3462,11336,3455,11337,3450,3459,11333,11338,11348,11346,11335,11342,3457,8828,3435,11316,3447,39,11350,2487,2486,3446,2485,3448,8831,3436,11330,3130,3439,11352,8829,8830,3441,11353,11322,3442,11323,11354,11324,3444,11325,3445,11319,11317,11355,11326,11320,11328],"class_list":{"0":"post-14729","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-euro-zone","8":"tag-apoll","9":"tag-bsent","10":"tag-ceeu","11":"tag-cen","12":"tag-csent","13":"tag-de","14":"tag-destabx","15":"tag-destafa","16":"tag-destbnx","17":"tag-destc","18":"tag-destcsa","19":"tag-destd","20":"tag-destdnp","21":"tag-deste","22":"tag-destef-markets-macromatters","23":"tag-destfun","24":"tag-destg","25":"tag-destgns","26":"tag-destgro","27":"tag-destlby","28":"tag-destm","29":"tag-destmtl","30":"tag-desto","31":"tag-destocabsm","32":"tag-destoil","33":"tag-destortao","34":"tag-destoukbsm","35":"tag-destousbsm","36":"tag-destpge","37":"tag-destpsc","38":"tag-destptd","39":"tag-destrast","40":"tag-destrbn","41":"tag-destreulb","42":"tag-destrnp","43":"tag-destrws","44":"tag-destrwsa","45":"tag-destsof","46":"tag-destu","47":"tag-destucdptest","48":"tag-eci","49":"tag-eco","50":"tag-efmarkets-macromatters","51":"tag-emea","52":"tag-eu","53":"tag-eur-pmis","54":"tag-euro-area","55":"tag-euro-zone","56":"tag-europ","57":"tag-eurozone","58":"tag-ez","59":"tag-ezc","60":"tag-fin","61":"tag-fr","62":"tag-gdp","63":"tag-gen","64":"tag-ilei","65":"tag-infl","66":"tag-int","67":"tag-intag","68":"tag-ipr","69":"tag-job","70":"tag-mce","71":"tag-mplt","72":"tag-mtpix","73":"tag-news1","74":"tag-plcy","75":"tag-pmi","76":"tag-pol","77":"tag-rep","78":"tag-rpoll","79":"tag-stx","80":"tag-topcmb","81":"tag-topnws","82":"tag-weu"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/14729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=14729"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/14729\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/14730"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=14729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=14729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=14729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}