Eurozone Growth Faces "Roadblocks" as Berenberg Warns of Stagflation Risk

According to Golden Ten Data on March 6, analysts at Berenberg Bank pointed out in a report that a deteriorating situation in the Middle East would deliver a significant blow to eurozone growth. They stated: "In the optimistic scenario, the Strait of Hormuz will reopen by the end of March, allowing energy exports from the region to resume before the end of the month." This would only slightly adjust the outlook for the eurozone, which remains Berenberg's baseline expectation. However, if this uncertainty persists for longer, the high energy costs faced by businesses and the decline in consumer purchasing power will lead to stagnation in growth in the second and third quarters. They noted: "Full-year GDP growth in 2026 will fall to 0.7%, while the inflation rate will rise to 3.1%." In comparison, the European Central Bank currently forecasts 2026 growth at 1.2% and inflation at around 2%.