The European Union warns that a ceasefire cannot hide concerns over “stagflation” and plans to lower economic growth forecasts.

Golden Ten Data reported on April 9 that, according to the Financial Times, European Commission Executive Vice-President Dombrovskis has warned that despite a two-week ceasefire agreement between the US and Iran, the EU will still face a "stagflation shock" caused by low growth and rising inflation. Due to the ongoing high uncertainty surrounding the consequences of the Middle East conflict, the European Commission is preparing to downgrade this year’s growth forecast. Regarding the ceasefire agreement, he stated, "This is undoubtedly a welcome step toward de-escalation and is likely to ease the energy crisis." However, he cautioned, "The economic impact of the Iran war, of course, still faces a high degree of uncertainty," and "it is clear that we are facing a stagflation shock." The European Commission will update its official GDP forecast in May. Prior to the outbreak of the conflict, the Commission forecasted EU economic growth to remain at 1.4% this year and 1.5% in 2027. However, according to analysis shared with the Financial Times, recent scenario calculations by the Commission suggest that if energy prices return to pre-Iran war levels by the end of 2026, this year’s economic growth could slow by as much as 0.4 percentage points. If it takes longer for energy prices to fall back to pre-war levels, economic growth in both this year and next year could slow by 0.6 percentage points, respectively.