EC Spring 2026 Forecast: Downside Scenario of Prolonged High Energy Prices from Middle East Conflict (economy-finance.ec.europa.eu)

• EU GDP growth nearly halves to 0.7% in 2026 and 2027 under the downside scenario.
• Oil prices peak at 180 USD/bbl, European gas at 80 EUR/MWh.
• Inflation rises to 3.3% in 2026 and 3.5% in 2027.
• Monetary policy tightens by ~30 basis points in 2027; fiscal balance worsens by 0.5% of GDP.

"The European Commission's Spring 2026 Economic Forecast includes a downside scenario where the Middle East conflict causes oil and gas prices to remain high well into 2027. Under this scenario, EU GDP growth nearly halves to 0.7% in both 2026 and 2027, while inflation rises to 3.3% in 2026 and 3.5% in 2027. Oil prices peak at 180 USD/bbl and gas at 80 EUR/MWh. The analysis uses the Commission's Global Multicountry model."