ECB: Iran's war affects Eurozone consumption
The Iranian war led to a sharp decline in household spending in the Eurozone, as consumer confidence fell significantly amid concerns over inflation and the war's impact on income. Data also showed a slowdown in nominal consumption growth to around 2.5% in April, the lowest level since mid-2024, with high-income households focusing on reducing non-essential purchases due to deteriorating confidence and fears of economic repercussions. The rise in energy prices following the outbreak of the war increased inflation fears and diminished purchasing power, prompting about 40% of consumers to expect that income losses would not be recovered in the future. Continued uncertainty may further dampen spending and threaten the Eurozone's economic growth.
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