The European Union's executive commission cut its growth outlook and predicted higher inflation due to sharply higher energy prices from the war in Iran ' but said the economy will avoid an outright recession. 'As a net energy importer, the EU's economy is highly susceptible to the energy shock caused by the conflict in the Middle East,' the commission said in a statement Thursday. The rising cost of fuel means higher household bills and surging business costs that reduce profits for many industries'. After reaching 1.5% in 2025, EU GDP growth is now projected to slow down to 1.1% this year'0.3 pps, lower than in the Autumn 2025 Forecast'while inflation is expected to rise to 3.1%, an upward revision of a full percentage point compared to the Autumn 2025 Forecast. Global growth (excluding the EU) is now projected at 3.1% in 2026 and 3.5% in 2027.

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