Iran War Hits Europe’s Economy as Energy Shock Spreads Across Growth and Inflation Outlook
By Bosphorus News Economy Desk
The economic impact of the Iran war is beginning to feed directly into Europe’s growth and inflation outlook, as rising energy prices ripple across industries, supply chains and policy decisions.
A report by TC Lira finds that the shock is no longer confined to oil and gas markets. Higher input costs are forcing a broader reassessment of economic expectations across the continent, particularly in energy intensive economies such as Germany and Italy.
The pressure is also complicating the policy environment for central banks. As inflation risks increase while growth weakens, policymakers are being pushed toward more difficult trade-offs between supporting economic activity and containing price pressures.
At the same time, transport and logistics costs are rising, adding strain to supply chains and increasing the likelihood that higher energy prices will feed further into consumer inflation.
The report warns that if the conflict persists, the impact could widen from an energy shock into a broader economic drag, affecting production, consumption and public finances across Europe.
***Full reporting in Turkish: