Eurozone economic activity slows down amid Middle East conflict

K-LinePoet · 2026-03-29T12:00:06+00:00

Affected by the Middle East conflict, the Eurozone's economic recovery has slowed down, with the March Composite Purchasing Managers' Index dropping to 50.5, and the services sector hitting a new low since last year. The manufacturing sector performed relatively well, but overall economic growth faces challenges from inflationary pressures. The European Central Bank forecasts that future economic growth and inflation will come under further pressure.

K-LinePoet

2026-03-29 12:00:06

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The conflict involving the United States, Israel, and Iran has disrupted the Middle East war, and the eurozone’s economic recovery momentum has recently slowed. Data released by S&P Global on the 24th showed that the eurozone’s composite Purchasing Managers’ Index (PMI) for March fell to 50.5, significantly below last month’s 51.9. The data indicated that the eurozone’s services PMI for March dropped sharply to 50.1, the lowest since May of last year. At the same time, new orders in the services sector declined for the first time in eight months, dragging down overall economic growth. In contrast, the manufacturing PMI rose to 51.4, performing better than expected. Chris Williamson, chief business economist at S&P Global Market Intelligence, stated that the energy shock caused by the Middle East conflict would substantially increase inflation and hinder eurozone economic growth, “ringing an alarm for stagflation.” The European Central Bank recently forecast that the Middle East conflict could weigh on eurozone economic growth and intensify upward inflation pressures. By 2026, the overall inflation rate in the eurozone is expected to reach 2.6%, with the economy projected to grow by 0.9%. (Xinhua News Agency)

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