Politico has learned about the decline in economic growth forecasts by the European Union

Brussels lowered forecasts for economic growth in the European Union by 0.3% due to a sharp rise in energy prices after the blocking of the Strait of Hormuz. This was reported on May 21 by the Politico newspaper with reference to the European Commission's spring economic forecasts.

The EU authorities expect that the conflict in the Middle East will lead to an increase in inflation and public debts of member states throughout the bloc, so the projected growth rate of the EU economy in 2026 has been reduced from 1.4% to 1.1%, the report says.

It is estimated that the economies of the three largest EU countries — Germany, France and Italy — will grow by only 0.6%, 0.8% and 0.5%, respectively, this year, which is significantly lower than the EU average. Inflation in the bloc is also projected to rise to 3.1%, which is a full percentage point more than predicted in the fall, the newspaper notes.

"Regardless of the progress of the peace talks between the United States and Iran, the economic consequences of the conflict will be felt in the coming years," the article says.

The average government budget deficit in Europe is expected to grow from 3.1% of GDP in 2025 to 3.6% in 2027. The growth of the bloc's economy in 2027 is projected at 1.4%.

At the same time, it became known that the European Commission raised the estimate of Russia's GDP growth in 2026 from 1.1% to 1.3%. The EC also pointed to a downward trend in inflation in the Russian Federation.

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European Commissioner for Energy Dan Jorgensen said on May 13 that Europe had overpaid €35 billion for energy since the start of the war in the Middle East. He noted that the European Union, despite the diversification of energy supply chains and other measures taken, is still vulnerable to such economic shocks.

Kirill Dmitriev, head of the Russian Direct Investment Fund and special representative of the President of the Russian Federation for investment and economic cooperation with foreign countries, said on May 21 that the energy crisis would inevitably hit the UK and the EU countries.