Eurozone Posts Strongest Quarterly Growth in Over a Year Amid Tensions with Iran
The eurozone economy has shown resilience in the face of tensions with Iran, posting its strongest quarterly growth in over 12 months. According to Eurostat, the region's GDP increased by 0.4% quarter-on-quarter in the second quarter of 2026, exceeding the 0.2% growth forecast.
Despite sharp increases in oil prices and inflation, which have squeezed household budgets and weighed on investment, the eurozone has withstood the disruption caused by the conflict involving Iran. Germany, France, Italy, and Spain all posted positive economic growth, with some economies showing significant improvement.
The European Central Bank (ECB) warned that the full impact of the initial energy shock 'has not yet materialized,' but left interest rates unchanged this month. However, some policymakers now support another rate increase following June's hike, while investors are pricing in an additional move in September.