Euro-Zone Growth Slows as Iran War Brings Stagflation Closer

The euro-area economy unexpectedly slowed at the start of 2026, with soaring energy costs triggered by the Iran war threatening stagflation in the months ahead.

First-quarter gross domestic product rose 0.1% from the previous three months — below the 0.2% median estimate in a Bloomberg poll. Spain led the way again among the region’s top economies, expanding by 0.6%. Germany grew by 0.3%, while France unexpectedly stagnated.