Eurozone GDP grew 0.3% in Q1 2026 before geopolitical tensions disrupted economic momentum, ECB President Lagarde noted.
European Central Bank President Christine Lagarde said the euro area economy expanded 0.3% quarter-on-quarter in Q1 2026, but growth has since stalled due to the Middle East war. The conflict has introduced new supply shocks, complicating monetary policy decisions.
Inflation had stabilized near the ECB’s 2% target for over a year before the war, with economic activity showing resilience. However, incoming data now reflects weaker momentum, raising concerns about sustained price pressures and growth risks.
Lagarde emphasized the ECB’s strategy to navigate geopolitical uncertainties while maintaining price stability. Markets await further guidance on rate adjustments amid evolving risks.