5:55 18 June 2026
Mideast tensions cloud EU outlook
A new EY forecast warns that global tensions, especially the Middle East conflict, will slow eurozone growth to just 0.5 percent in 2026 before a gradual recovery. Poland is expected to keep outpacing its neighbours, with 2026 GDP growth projected at 3.6 percent on the back of strong domestic demand, EU-funded investment and resilient exports.
EY's chief economist for Europe and Central Asia, Marek Rozkrut, said a further escalation in the Middle East and sustained high commodity prices could tip Europe into recession, though a quick de-escalation would limit the damage to a temporary price shock. EY expects Polish inflation to average around 3 percent this year and 3.5 percent in 2027, with the central bank likely holding rates steady barring a sharper spike.
