The number incorporated weaker than expected figures from France, where GDP was flat from the fourth quarter. But the region\u2019s largest economy Germany performed better than feared, growing 0.3 percent, while growth in Italy and Spain slowed by less than forecast.<\/p>\n
The war \u2014 and the resulting surge in oil and gas prices \u2014 has sharply changed the economy\u2019s trajectory. The German government has halved<\/a> its growth forecast for this year to only 0.5 percent. The International Monetary Fund earlier this month downgraded its 2026 growth forecast for the eurozone to 1.1 percent, from a prior estimate of 1.3 percent. It warned that rising prices and weaker activity are pushing the region toward a more stagflationary environment.<\/p>\n Inflation, by contrast, is on the way up, due to the surge in energy costs. The headline inflation rate jumped to 3.0 percent in April, Eurostat said in a separate release<\/a>. Core inflation, which strips out volatile oil and food prices and is seen as a bellwether for underlying trends, eased to 2.1 percent from 2.2 previously, but prices still rose a notable 0.9 percent from March.<\/p>\n Striking the right balance<\/p>\n Economists warn that it will take months for the full impact of the war to be felt, and survey data also suggest that things will get worse before they get better.<\/p>\n S&P Global\u2019s composite purchasing managers index for the eurozone, a rough proxy for private-sector activity, slipped back<\/a> into contraction territory in April after 15 months of growth, while the prices paid and charged by industry both surged. Consumer surveys from the European Central Bank<\/a> and European Commission <\/a> also show inflation expectations jumping sharply.<\/p>\n Much will depend on monetary policy striking the right balance. The ECB is walking a tightrope \u2014 trying to contain inflation without tipping the economy into a deeper slowdown by raising borrowing costs.<\/p>\n","protected":false},"excerpt":{"rendered":"The number incorporated weaker than expected figures from France, where GDP was flat from the fourth quarter. But…\n","protected":false},"author":2,"featured_media":90829,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[2670,11624,154,375,12854,537,12855,1004,34,12856,213,36],"class_list":{"0":"post-90828","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-iran","8":"tag-central-banks","9":"tag-christine-lagarde","10":"tag-energy","11":"tag-energy-prices","12":"tag-eurozone","13":"tag-germany","14":"tag-growth","15":"tag-inflation","16":"tag-iran","17":"tag-monetary-policy","18":"tag-oil","19":"tag-war"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@iran\/116493224649215605","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/90828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/comments?post=90828"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/posts\/90828\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media\/90829"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/media?parent=90828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/categories?post=90828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/iran\/wp-json\/wp\/v2\/tags?post=90828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}