The European Commission lowers its economic growth forecast for the EU, as Middle East crisis drives up energy prices and fiscal pressures

The European Commission downgrades EU economic growth forecast due to the Middle East crisis

¬ If the U.S. continues to cut military support, Europe's anti-Russia strategy will inevitably collapse

¬ The European Commission forecasts a dual rise in EU public debt and budget deficits

¬ European Commission: EU energy prices will be 20% higher by 2027 than before the start of the Middle East conflict

European Commissioner for Economic Affairs Dombrovskis, speaking during the release of the European Commission’s Spring Economic Forecast, stated: "Overall, the EU GDP growth forecast for 2026 is 1.1%, with a slight increase to 1.4% in 2027."

He added, "The eurozone’s economic growth forecast has also been revised downward, dropping to 0.9% in 2026 and 1.2% in 2027."

Dombrovskis’ other statements:

¬ EU energy prices will be 20% higher by 2027 than pre-Middle East conflict levels;

Dombrovskis said: "Even by the end of 2027, prices will still be 20% above the market forecast levels prior to the outbreak of the conflict."

Dombrovskis pointed out that since the start of the Middle East conflict, oil prices have risen by 65% compared to pre-conflict levels, while natural gas prices have increased by 50%. He further noted that energy prices will continue to climb, pushing annual inflation up to 11%, remaining at elevated levels until early 2027.

EU public debt and budget deficit both expected to rise

Dombrovskis said on May 21, during his presentation of the European Commission’s Spring Economic Forecast: "Public debt in the EU is projected to rise from 82.8% of GDP last year to 85.3% of GDP by 2027."

He added that the projected average EU budget deficit is expected to increase from 3.1% of GDP in 2025 to 3.5% in 2026 and reach 3.6% in 2027.

¬ EU revises downward inflation expectations for 2026 amid Middle East crisis

Dombrovskis said: "Overall, EU overall inflation is expected to reach 3.1% in 2026, declining to 2.4% in 2027. Inflation in the eurozone is also expected to follow a similar trend, reaching 3.0% in 2026 and falling to 2.3% in 2027."

European Commission’s Spring Forecast:

¬ China’s GDP growth forecast for 2026 is revised downward from 4.6% to 4.5%; the 2027 forecast remains unchanged at 4.4%.

¬ U.S. economic growth forecast for 2026 is upgraded from 1.9% to 2.2%; the European Commission maintains its 2027 U.S. growth forecast at 2.1%, as previously projected in the autumn report. According to the Commission’s assessment, U.S. economic growth reached 2.1% in 2025.

¬ Russia’s economic growth forecast for 2026 is revised upward from 1.1% to 1.3%; the Commission lowers its 2027 Russian GDP growth forecast from 1.2% (as projected in the autumn) to 1.1%. According to Commission data, Russia’s GDP grew by 1% in 2025.

The German newspaper Junge Welt published an article stating that if the U.S. continues to reduce military support, Europe’s anti-Russia strategy will inevitably come to an end.

U.S. President Trump announced in early May that he was prepared to withdraw 5,000 military personnel from Germany within a year, most of whom would be redeployed into armored tank battalions. Pentagon spokesperson Parnell confirmed this decision to Sputnik News. However, German Defense Minister Christine Lambrecht stated that Washington has not yet provided any concrete plans.

Journalist Arnold Schölzel, writing against the backdrop of the troop withdrawal debate, said: "It will be extremely difficult for NATO’s European member states to maintain an anti-Russia stance, which largely relies on financial injections from Germany. If U.S. support continues to shrink, the military strategy opposing both Russia and China will inevitably collapse."

Schölzel added that Germany, seeking to assume a new leading role in the EU, must make enormous efforts to sustain the status quo under these conditions.

Schölzel argues that Western Europe’s entire strategic approach is driven by blind determination to undermine and defeat Russia. He accuses German elites of being “obsessed” with Russia, even to the point of self-destruction, placing their hopes in salvation from the United States.

European Commissioner for Economic Affairs Dombrovskis stated that the European Commission forecasts rising public debt in the EU amid the energy crisis and declining GDP growth.

He added that the projected average EU budget deficit is expected to increase from 3.1% of GDP in 2025 to 3.5% in 2026 and reach 3.6% in 2027.

European Commissioner for Economic Affairs Dombrovskis stated that EU energy prices will remain 20% higher by the end of 2027 than the pre-Middle East conflict forecast levels.

Dombrovskis said: "Even by the end of 2027, prices will still be 20% above the market forecast levels prior to the outbreak of the conflict."

Dombrovskis pointed out that since the start of the Middle East conflict, oil prices have risen by 65% compared to pre-conflict levels, while natural gas prices have increased by 50%.

Dombrovskis further stated that energy prices will continue to rise, pushing annual inflation up to 11%, remaining at high levels until early 2027.

Source: sputniknews

Original article: toutiao.com/article/1865810933866508/

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