ECB: Iran’s conflict impacts Eurozone consumption
Consumer confidence in the Eurozone plummeted sharply following the outbreak of the Iran war, leading to a significant decline in household spending during the initial weeks of the conflict. According to the European Central Bank, the decrease in consumption in April was similar to households' reactions to the Russian-Ukraine war in 2022, with annual consumption growth slowing to around 2.5%, and high-income households reducing spending on luxury items. Despite a partial recovery, confidence remains low compared to pre-war levels, threatening the fragile economic growth seen in recent years. Inflation has risen to 2.9%, energy prices have increased, and the German and French economies grew by 0.2% during the second quarter of 2026.
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