War in the Middle East is burning through every corner of the global economy, with Europe facing serious economic consequences

The International Monetary Fund has lowered its growth forecast for the euro area from 1.4% to 1.1%.

According to the IMF’s World Economic Outlook report, disruptions in energy (oil) markets caused by the blockade of the Strait of Hormuz and infrastructure damage across the Middle East have effectively halted the recovery of the world’s major economies.

The IMF revised down its 2026 growth projection for the euro area from 1.4% to 1.1%, citing high inflation and weakening momentum.

The downward revision is described as a direct consequence of the war in Iran, which has sent shockwaves through international markets.

Global inflation expectations were also raised to 4.4%.

In other words, unless the U.S.-Israel-Iran war comes to an end, the economic fire could spread everywhere.

Source: Euronews