World Bank and IMF slash growth forecasts for Eurozone and Romania amid Middle East war

The International Monetary Fund urged eurozone governments to tighten fiscal rules rather than relax them, warning that further easing could undermine credibility and raise debt trajectories. The IMF lowered its eurozone growth projection for this year to 0.9% (down from 1.1%) and raised the inflation outlook to 2.8%.

The World Bank reduced the global GDP growth outlook for 2026 to 2.5%, the lowest level since the pandemic, citing the war in the Middle East and its asymmetric impact on energy supplies. It warned that a more severe energy shock could push expansion down to 1.3% and trigger financial‑market stress.

In a country‑specific update, the World Bank cut Romania’s 2024 growth forecast to zero, revising 2027 growth to 1.7% and noting limited fiscal space, high deficits and lingering pressure from higher energy prices. The report highlighted that upcoming elections add further uncertainty.

A consumer‑sentiment survey in Romania showed 72% of respondents view the national economy negatively, with 75% most worried about energy prices and 73% about inflation—the highest levels in Europe. Respondents expect continued price rises and anticipate saving any extra income rather than spending it.