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Iran war effects on Europe: Is a recession already unfolding?

The eurozone’s private sector slipped back into contraction in April, marking its weakest performance in nearly a year and a half since November 2024, as the war in Iran hit services and fuelled inflation.

READ MORE : http://www.euronews.com/2026/04/23/iran-war-effects-on-europe-is-a-recession-already-unfolding

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00:02The war in Iran has done what no trade dispute or tariff threat has managed to achieve over
00:08the past two years. The conflict has pushed the economy into decline in April while driving
00:16inflation sharply higher according to S&P Global. Germany saw its first contraction in activity in
00:23almost a year while France's slowdown deepened to its weakest level in over a year. The service
00:31sector recorded its weakest performance since the pandemic lockdowns in early 2021. Manufacturing
00:38paradoxically went the other way but the gain is misleading. Companies are ordering inputs ahead
00:45of expected shortages and further price increases. Hence the increase in production reflects defensive
00:51stockpiling rather than recovering demands.
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