Europe faces stagflation as war continues with Iran

Rising energy prices, geopolitical tensions, and inflation are pushing the EU economy into a period of higher risk, with growing concerns about stagflation, a mix of slow growth and high inflation. Valdis Dombrovskis warned that conflicts, including with Iran, are driving up energy costs and weakening economic growth.

At the same time, Kyriakos Pierrakakis noted that the EU is not yet fully in stagflation, though forecasts are worsening. Christine Lagarde added that the term may not fully describe today’s situation.

The EU is better prepared than in 2022, but high debt and limited fiscal space reduce its ability to respond effectively.

(pb.pl)