Washington, May 29, 2026: The Heads of the International Energy Agency, International Monetary Fund, World Bank Group and World Trade Organization met on May 28 as part of the high-level coordination group established in April to maximize their institutions’ response to the energy, trade, and economic impacts of the war in the Middle East. Following the meeting, they issued the statement below: 
“The war in the Middle East is generating substantial and highly asymmetric impacts on energy supplies, food security, and economic activity across countries and regions. While the global economy continues to show resilience, the effects of the conflict are disproportionately affecting the most vulnerable countries through higher fuel and fertilizer prices, increased uncertainty, and risks to jobs and livelihoods. Higher fertilizer prices are of particular concern as many countries enter the planting season.
“At the same time, global oil inventories are being drawn down at a record pace in response to the major loss of supply through the Strait of Hormuz. If shipping flows do not return to normal, continued rapid depletion of global oil inventories ahead of peak summer oil demand in the Northern Hemisphere would present increasing risks for fuel security, market conditions, and broader economic resilience.
“We met to take stock of the impacts, discuss the situation in the most affected countries and regions, and coordinate our support to those in need. We also explored options to further enhance collective support through multilateral and bilateral actions.
“We highlighted the importance of closely monitoring fertilizer supply chains, energy and economic developments as well as policy responses. In this regard, we are tracking and analyzing measures taken by governments to address the economic impact of the conflict, with a view to promoting transparency, sharing lessons, and identifying emerging risks.
“We will remain in close contact as the situation evolves and continue coordinating our efforts to support the countries most affected and global economic stability.”
About the International Energy Agency
The International Energy Agency, the global energy authority, was founded in 1974 to help its member countries coordinate collective responses to major oil supply disruptions. Its mission has expanded and evolved since, and rests today on three main pillars: working to ensure global energy security; expanding energy cooperation and dialogue around the world; and supporting a secure, affordable and sustainable energy future. For more information, visit https://www.iea.org/.
About the International Monetary Fund
The IMF is a global organization that works to support economic growth and prosperity for all of its 191 member countries. It does so by supporting economic policies that promote financial stability and monetary cooperation, which are essential to increase productivity, job creation, and economic well-being. The IMF is governed by and accountable to its member countries. For more information, visit  https://www.imf.org
About the World Bank Group
The World Bank Group works to create a world free of poverty on a livable planet through a combination of financing, knowledge, and expertise. It consists of the World Bank, including the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). For more information, please visit www.worldbank.org, ida.worldbank.org/en/home, www.miga.org, www.ifc.org, and www.icsid.worldbank.org.
 
About the World Trade Organization (WTO)
The World Trade Organization is the international body responsible for governing global trade rules among its 166 members. It provides a forum for negotiating agreements, monitors trade policies, and ensures transparency and predictability. The WTO also helps settle trade disputes among its members and offers technical assistance to developing economies. Its objective is to facilitate the smooth flow of trade and support economic growth, stability and job creation. For more information, visit www.wto.org
 
 
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Europe’s startup and scaleup ecosystem has been growing steadily, according to the first-ever European Startup and Scaleup Scoreboard (ESSS) published today by the European Commission. 
The scoreboard reveals a clear trend: pro-startup policies drive real results. Since 2020, the baseline year for the Scoreboard, 20 out of 27 EU Member States have improved their performance, proving that targeted support for founders fuels innovation, job creation, and economic growth.
Where policy leads, founders follow
The Scoreboard highlights a direct link between innovation-friendly regulations, access to talent, and venture capital – and the success of startups and scaleups. Front-runner countries – Estonia, Sweden, Finland, the Netherlands and Denmark – perform well above the EU average (from 40 to 60 percentage points) in 36 measuring indicators, showing how bold policies translate into thriving ecosystems:

Estonia leads in digital infrastructure and early-stage funding, with 615 venture capital-backed companies per million inhabitants – the highest in the EU.
Sweden excels in talent and later-stage financing, producing 409 unicorns per million inhabitants – more than any other EU nation.
Finland combines strong R&D investment with high patenting activity, proving that innovation and commercialisation go hand-in-hand.

Policy gaps hold back innovation
While the ESSS 2026 celebrates progress, it also reveals untapped potential in rising countries (Greece, Latvia, Bulgaria, Slovakia, Romania), which score 30 percentage points below the EU average in the same 36 measuring indicators. Three key challenges stand out:

Weak venture capital access: Later-stage funding is scarce, forcing high-growth companies to look abroad for capital.
Scaling bottlenecks: Fragmented regulations and slow administrative processes delay expansion, costing time and momentum
Brain drain: Talent leaves for more dynamic ecosystems, draining local innovation.

From results to action
The Scoreboard’s results and analysis will help shape a series of strategic actions aimed at further strengthening Europe’s startup and scaleup ecosystems – particularly the upcoming European Innovation Act.
The Commission has put forward a number of initiatives to attract and retain talent and respond to the needs of innovative companies. This includes EU Inc., a proposal for a new single set of corporate rules for companies to operate across the EU; the European Business Wallet to simplify cross border business operations; and the EU Visa Strategy, with measures to support the EU’s global competitiveness, attract and retain talent, and make legitimate travel easier, faster and more predictable for tourists and business travellers.
Background
The European Startup and Scaleup Scoreboard is one key deliverable of the EU Startup and Scaleup Strategy, ‘Choose Europe to Start and Scale’, which was published exactly a year ago to make Europe the best place to launch and grow global technology-driven companies.
The Strategy sets out 26 concrete measures that are designed to accelerate the journey from innovation to commercial success and empower entrepreneurs across the EU. To track this progress, the new Scoreboard evaluates national ecosystems across six key pillars:

Innovation-friendly regulation
Better financing for startups and scaleups
Fast market uptake and expansion
Support for the best talent in Europe
Access to infrastructure, network and services
Impact

To ensure a rigorous assessment, the scoreboard tracked 36 distinct performance indicators from 2020 through 2025. The analysis combines official public data from Eurostat and the Joint Research Centre with private market tech insights from Dealroom and the European Startup Nations Alliance. To reflect the most up-to-date definitions and data, the underlying datasets were finalised in early 2026.
Based on their final index scores, EU countries are ranked into four distinct performance tiers:

Front-runners: performing above 125% of the EU average
High-performing: 100% to 125% of the EU average
Catching-up: 70% to 100% of the EU average
Rising: Below 70% of the EU average

 
 
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Despite disruptions to trade related to the current crisis in the Middle East, G20 merchandise trade expanded strongly in Q1 2026. Measured in current US dollars, both exports and imports increased by 5.3% quarter-on-quarter compared with Q4 2025, driven partly by trade of semiconductors and other high-tech products in East Asia. Preliminary estimates indicate that G20 trade in services1 expanded modestly, with exports rising by 1.7% and imports by 1.5% (Figures 1 and 3).
In North America, merchandise trade exports from the United States rose by 9.3%, driven by non-monetary gold and petroleum products, while imports increased by 8.1%, partly reflecting higher purchases of computers and telecommunications equipment. Canada’s exports increased by 2.4%, supported by energy products, notably natural gas and crude oil, while imports rose by 5.3%, concerning mainly metal products. In Mexico, both exports and imports increased by 4.1%. East Asian economies recorded strong trade growth. China’s exports rose by 13.5%, led by semiconductors and high-technology products, while imports increased by 16.7%, partly reflecting computer purchases. Japan’s exports increased by 5.9%, supported by ships and non-ferrous metals, while imports rose by 4.8%, driven in part by raw materials, non-ferrous metal ores and semiconductors. Korea’s exports surged by 22.7%, supported by semiconductors and wireless communication devices, while imports increased by 7.0%, reflecting semiconductor purchases. In the European Union, exports and imports rose more modestly by 1.1% and 1.5% respectively. Germany’s exports and imports both increased by 1.9%, partly reflecting trade in precious stones and metals. Italy’s exports increased by 3.2%, led by metals and pharmaceuticals, while imports rose by 2.9%, notably in metals and automobiles. In the United Kingdom, exports rose by 3.0% and imports by 5.3%, partly driven by trade with the European Union in office machinery. Brazil’s exports were broadly flat, while imports rose by 4.2%, notably in mechanical appliances and fertilisers.
International trade in services expanded modestly in Q1 2026. Among G7 economies, services exports rose by 2.3% in the United States, driven by maintenance and repair, ICT, and insurance services, while imports increased by 2.5% due to stronger spending on transport and intellectual property products. Similarly, in Canada, exports rose by 1.9%, supported mainly by higher travel and transport receipts, while imports grew sharply (4.1%) on the back of increased expenditures in government and other business services. Germany recorded marked growth in services exports (4.6%), supported by travel, insurance, and financial services, while imports rose by 3.0%, reflecting higher travel spending abroad. French services exports were stable, as higher transport and travel receipts were offset by lower revenues from financial services, while imports declined by 1.6%, partly due to reduced transport payments. The United Kingdom recorded modest increases in both exports and imports, with import growth largely driven by other business services. Japan’s services exports fell by 1.2%, mainly reflecting weaker travel and intellectual property receipts, while imports rose by 2.6%, led by transport and other business services. Conversely, in Korea, services exports rose sharply (6.4%), with strong travel receipts, while imports fell by 2.2%, as lower travel payments more than offset higher transport expenditures (freight in particular). In Türkiye, services exports fell by 7.2%, mainly due to insurance and other business services. In China, services imports rose by 3.3%, partly driven by higher transport and travel payments.
Click here to access the interactive charts.
 
 

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Blog | Geopolitical shocks influence consumer expectations about inflation and growth. This blog explores how the wars in Ukraine and Iran affect the way households think about the economy and shows how the scars of past experiences amplify reactions to subsequent geopolitical conflicts.
Recent movements in euro area consumers’ inflation and growth expectations show that geopolitical shocks influence households’ economic beliefs. Drawing on the ECB’s Consumer Expectations Survey (CES)[1], this blog post compares households’ reactions to the 2022 invasion of Ukraine with their responses to the 2026 war in Iran. It also explores how the current shock interacts with the “scars” left by earlier periods of high inflation and geopolitical tensions. The results show that repeated geopolitical shocks reinforce fears about stagflation, with short-term expectations being especially sensitive. As consumers are highly attentive to economic news, the findings also highlight the crucial role of communication and of maintaining trust in the ECB to limit spillovers to longer-term inflation expectations.

How geopolitical conflicts influence consumer expectations: insights from two wars
Russia’s invasion of Ukraine triggered a sharp rise in energy prices, intensified concerns about stagflation and exacerbated the already elevated inflationary pressures of the post-pandemic recovery. In addition, the ensuing prolonged conflict and subsequent geopolitical shocks have created an environment of heightened macroeconomic uncertainty. Even if there are important differences in the economic consequences of the two conflicts, the war in Iran is likely to influence euro area households’ expectations through quite similar channels.[2] These include higher energy prices and reinforced macroeconomic uncertainty.
The most recent CES data from March 2026 show that consumer inflation and growth expectations are highly responsive to geopolitical conflicts.[3] In the immediate aftermath of the onset of the war in Iran, data reveal a pattern of reinforced beliefs about stagflation. Chart 1 shows a sharp rise in inflation expectations alongside a marked decline in growth expectations following the outbreak of both conflicts.

Chart 1
Inflation and growth expectations around the onset of two wars

(y-axis: inflation expectations 12 months ahead; x-axis: economic growth expectations 12 months ahead; mean values, percentage points)

Sources: ECB Consumer Expectations Survey (CES: EA-11) and authors’ calculations.
Notes: Population-weighted data. The chart depicts euro area average expectations about changes in prices in general and economic growth one year ahead. Both expectation series have been processed (winsorised) at the most extreme two percentiles to account for outliers. From April 2022 onwards, the sample also includes data from five new countries included in the survey: Ireland, Greece, Austria, Portugal and Finland. The underlying data are collected as part of the monthly CES survey module (see the ECB’s CES web page).

In March 2026, one month after the outbreak of the Iran war, consumers revised their mean (median) inflation expectations upwards by about 2.5 (1.5) percentage points. At the same time, growth expectations went down by about 1.2 percentage points. There are, however, notable differences from the situation in 2022 following the Russian invasion of Ukraine. First, mean (median) inflation expectations in February 2026 were 0.6 (0.7) percentage points below those of four years earlier and had been slightly declining before the shock. Second, growth expectations were more pessimistic in February 2026 than in February 2022 (Chart 1). Overall, the general shift towards a more stagflationary outlook is, so far, somewhat less pronounced than after Russia’s invasion of Ukraine. The current data, however, provide only a snapshot. Future CES rounds will show how these beliefs evolve as more information on the Iran conflict becomes available.
The three-year-ahead mean (median) inflation expectations recorded in the CES also show an uptick of 0.87 (0.44) percentage points in March 2026 following the outbreak of war in Iran, compared with an increase of 0.94 (0.85) percentage points following the invasion of Ukraine (Chart 2). Importantly, however, additional background analysis also highlights a significant shift in the distribution of medium-term inflation expectations in January 2026 compared with January 2022, indicating that consumers increasingly expected higher inflation over the medium term at the outset of the Iran war. The recent revisions in March therefore started from a higher level compared with the situation in 2022.

Chart 2
Inflation perceptions and expectations

(Mean values, percentage points)

Sources: ECB Consumer Expectations Survey (CES: EA-11) and authors’ calculations.
Notes: Population weighted data. Each bar reports the average for euro area consumers. All series have been winsorised at the most extreme two percentiles to account for outliers. From April 2022 onwards, the sample also includes data from five new countries included in the survey: Ireland, Greece, Austria, Portugal and Finland, (see the ECB’s CES web page).

When looking ahead, consumers tend to extrapolate from their short-term to their medium-term inflation expectations, and they may have yet to witness the full pass-through to prices at the retail level. As a result, there is certainly a risk of further upward revisions in medium-run inflation expectations in the future. Likewise, in a context of heightened uncertainty and volatility, consumers’ expectations may also overreact to some news. Conversely, this implies the possibility of a downward correction in expectations, especially if the situation stabilises.
The “double scar”: how past experiences amplify current reactions
Many households now carry cumulative experience from the post-pandemic and Ukraine-related inflation episodes. By early 2026, euro area households had lived through both the biggest inflation surge of recent times and a major war in Europe. Research shows that both experience and memory can have a pervasive influence on economic behaviour.[4] So there is good reason to believe that consumer expectations are shaped not only by current developments, but also by memories of these recent adverse events. Such “scars” may increase consumers’ sensitivity to new shocks. This makes stagflationary scenarios – rising prices and declining growth – more pronounced and persistent in their beliefs. And it could reinforce macroeconomic uncertainty and ultimately influence consumer spending.[5]
We provide two pieces of evidence to suggest that the earlier inflation surge and recent geopolitical conflicts are weighing on consumers’ current thinking.
First, the memories of the recent inflation episode have renewed consumers’ attention to inflation (Chart 3). While research shows that consumers are more attentive to inflation in high‑inflation environments and relatively inattentive when inflation is low and stable[6], CES results show thatin January 2023, when euro area inflation was 8.6%, almost half of the surveyed consumers reported that they were paying attention to price changes. This share had declined only modestly, to 41%, by August 2025, even though inflation was close to the ECB’s target. This suggests that recent high inflation has had a scarring effect: consumers who experienced the inflation surge are keeping a close eye on price developments, even as conditions normalise. Following the outbreak of the Iran war, and despite actual inflation remaining close to the ECB’s definition of price stability, attention to prices bounced back to almost 50% in March 2026. This again indicates that households quickly recalled the earlier conflict‑driven inflation surge.

Chart 3
Attention to inflation over time

(Percentage of consumers (left-hand scale) and percentage points (right-hand scale))

Sources: ECB Consumer Expectations Survey (CES: EA-11); experimental data, European Commission (Eurostat) and European Central Bank calculations based on Eurostat data, and authors’ calculations.
Notes: Population-weighted data. Each bar depicts the share of consumers for each self-assessed level of inflation attention. Consumers are asked how much attention they currently pay to changes in prices in general. Respondents can choose out of five options. 1 – Almost no attention, 2 – A little attention. 3 – Some attention, 4 – Much attention and 5 – A great deal of attention. Data is collected as part of special purpose survey modules. The bars show the share of respondents by attention level on the right axis: low (1–2), medium (3) and high (4-5). The dots represent EA HICP inflation rates in each of the respective survey months.

Second, the data show that consumers continuously fear that ongoing geopolitical risks will threaten their financial situation. Chart 4 shows that wars weigh on consumer sentiment: 35% of consumers reported being quite concerned (8 or higher on a 0-10 scale) in May 2022, with 25% of consumers reporting the same levels of concern in December 2024. This share remained elevated in December 2025. Consumers were therefore already highly concerned about the impact of geopolitical tensions on their own well-being shortly before the new conflict. As detailed in our earlier work[7], prolonged geopolitical conflict can inhibit consumer spending and create a drag on economic growth. In addition, it may also generate wage pressure if workers seek to compensate for the deterioration in their financial situation.
Taken together, this evidence suggests that consumers are experiencing the war in Iran with a potential “double scar”. One from the recent surge in inflation, the other from the prolonged effects of earlier geopolitical tensions. These two scars may reinforce each other and are likely to shape consumer expectations and behaviour in the coming months, as conflicts and heightened macroeconomic uncertainty persist.

Chart 4
Consumers’ concerns about geopolitical conflict

(Percentage of consumers)

Sources: ECB Consumer Expectations Survey (CES, EA-11), experimental data and authors’ calculations.
Notes: The chart reports population-weighted shares of respondents by their reported level of geopolitical concern. In December 2024 and December 2025, respondents were asked how concerned they were about the impact of current geopolitical events on their households’ financial situation over the 12 months that followed. In May 2022, the question referred specifically to the war in Ukraine and its expected impact on the respondents’ households’ financial situation. Responses were recorded on an 11-point scale from 0 (not concerned at all) to 10 (extremely concerned) and grouped as follows: low (0-2), medium (3-7) and high (8-10). Data were collected in special-purpose modules.

Trust and communication are important anchors for consumer expectations
Recent research using the CES shows that trust in the ECB plays an important role in anchoring inflation expectations. It also moderates significantly how households adjust inflation expectations in response to geopolitical conflict and energy shocks. Encouragingly, CES data suggest that trust in the ECB has improved as inflation has gone down, with trust standing at a relatively higher level in February 2026 than in February 2022.
When the central bank is perceived as credible and trustworthy, households are more likely to view deviations of inflation from target as temporary. And they are more likely to expect monetary policy to successfully stabilise inflation.[8] In contrast, low trust weakens this anchoring, leading to stronger and more persistent upward revisions in inflation expectations. In line with this, CES data show that following the outbreak of both conflicts, consumers with higher trust in the ECB revised their inflation expectations upwards by considerably less, on average, than those with lower trust.
Additional research shows that when households understand monetary policy better, public perception of central bank credibility strengthens.[9] The fact that consumers are currently highly attentive to inflation suggests that they are also more likely to follow economic news and developments. The current environment offers a window of opportunity for effective engagement with consumers, which can thereby reinforce central bank credibility, trust and public understanding of monetary policy.
From a policy perspective, these results underline that communication and credibility are integral to the transmission of monetary policy in the face of geopolitical shocks and their aftermath. Overall, the evidence suggests that trust in the ECB acts as a buffer against the de-anchoring of inflation expectations – maintaining credibility and effective communication therefore remain essential, especially in volatile macroeconomic and geopolitical environments.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.
 

For background on the CES, see also ECB (2021), “ECB Consumer Expectations Survey: An Overview and First Evaluation”, Occasional Paper Series, No 287, and Georgarakos, D. and Kenny, G. (2022), “Household spending and fiscal support during the COVID-19 pandemic: Insights from a new consumer survey”, Journal of Monetary Economics 129: S1-S14. The authors would like to thank the ECB CES team involved in collecting and processing the data and Ipsos for carrying out the survey.

The Ukraine war primarily drove a sharp rise in European gas prices, which quickly fed into electricity costs. Meanwhile, the Iran war has mainly pushed up crude oil prices, affecting transportation and heating costs.

See Coibion, O., Georgarakos, D., Gorodnichenko, Y., Kenny, G. and Meyer, J. (2025), “Geopolitical Risks and Their Implications for Consumer Expectations and Spending”, VoxEU/CEPR.

See Malmendier, U. and Nagel, S. (2016), “Learning from Inflation Experiences”, Quarterly Journal of Economics, 131(1), pp.53-87 and Salle, I., Gorodnichenko, Y. and Coibion, O. (2024), “Lifetime memories of inflation: Evidence from surveys and the lab”, National Bureau of Economic Research, No w31996; see also Barkhausen, D. (2025), “Hyperinflation: trauma and its reconstruction”, The ECB Blog, ECB, 20 June.

See Coibion, O., Georgarakos, D., Gorodnichenko, Y., Kenny, G. and Weber, M. (2024), “The effect of macroeconomic uncertainty on household spending”, American Economic Review, 114(3), pp.645-677; and Coibion, O., Georgarakos, D., Gorodnichenko, Y., Kenny, G. and Meyer, J. (2025), “Geopolitical Risks and Their Implications for Consumer Expectations and Spending”, VoxEU/CEPR.

See Weber, M., Candia, B., Afrouzi, H., Ropele, T., Lluberas, R., Frache, S., Meyer, B., Kumar, S., Gorodnichenko, Y., Georgarakos, D. and Coibion, O. (2025), “Tell Me Something I Don’t Already Know: Learning in Low‐and High‐Inflation Settings”, Econometrica, 93(1), pp.229-264.

See Gorodnichenko, Y., Georgarakos, D., Kenny, G. and Coibion, O. (2025), “The impact of geopolitical risk on consumer expectations and spending”, National Bureau of Economic Research, No w34195.

See Christelis, D., Georgarakos, D., Jappelli, T. and van Rooij, M. (2020), “Trust in the Central Bank and Inflation Expectations”, International Journal of Central Banking.

See Ehrmann, M., Georgarakos, D. and Kenny, G. (2025), “Credibility gains from central bank communication with the public”, European Economic Review, 177, 105069.

 
 
 
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Euro area
The first estimates of euro area balance showed a €7.8 bn surplus in trade in goods with the rest of the world in March 2026, compared with +€34.1 bn in March 2025.
The euro area exports of goods to the rest of the world in March 2026 were €265.3 billion, a decrease of 5.5% compared with March 2025 (€280.6 bn).
Imports from the rest of the world stood at €257.4 bn, a rise of 4.4% compared with March 2025 (€246.5 bn).
In March 2026, the euro area trade balance registered a surplus of €7.8 bn, down from €11.1 bn in February 2026.
Compared with March 2025, when the surplus was €34.1 bn, the latest figure represents a sharp decrease of €26.3 bn. This decline was primarily driven by substantial reductions in the surpluses of the chemicals and related products group and the machinery and vehicles group. The first group recorded the most pronounced drop, with its surplus nearly halving, from €41.8 bn in March 2025 to €18.9 bn in March 2026, while the second group saw a less steep but still significant decline, with its surplus falling from €17.6 bn to €9.7 bn over the same period.
In January to March 2026, the euro area recorded a surplus of €16.6 bn, compared with €55.4 bn in January-March 2025.
The euro area exports of goods to the rest of the world fell to €713.1 bn (a decrease of 6.5% compared with January-March 2025), and imports fell to €696.5 bn (a decrease of 1.5% compared with January-March 2025).
Intra-euro area trade rose to €685.5 bn in January-March 2026, up by 1.9% compared with January-March 2025.
European Union
The EU balance showed a €5.9 bn surplus in trade in goods with the rest of the world in March 2026, compared with +€34.0 bn in March 2025.
The extra-EU exports of goods in March 2026 were €233.9 billion, down by 8.7% compared with March 2025 (€256.1 bn).
Imports from the rest of the world stood at €228.0 bn, up by 2.7% compared with March 2025 (€222.1 bn).
In March 2026, the EU trade balance stood at a surplus of €5.9 bn, down from €9.1 bn in February 2026. This decline was influenced by a widening deficit in the energy group, which deteriorated from €-21.9 bn in February 2026 to €-28.6 bn in March 2026, partially offset by the increase of surplus in the chemicals and related products group, which moved from €14.9 bn to €17.6 bn over the same period.
Compared with March 2025, when the EU recorded a surplus of €34.0 bn, the latest figure represents a sharp decrease of €28.1 bn. This decline was primarily driven by substantial reductions in the surpluses of the chemicals and related products group and the machinery and vehicles group. The chemicals and related products group saw its surplus nearly halve, dropping from €40.8 bn in March 2025 to €17.6 bn in March 2026. Similarly, the machinery and vehicles group experienced a significant decline, with its surplus falling from €21.6 bn to €11.3 bn over the same period.
In January to March 2026, the EU recorded a surplus of €8.4 bn, compared with €50.7 bn in January-March 2025.
The extra-EU exports of goods fell to €630.0 bn (a decrease of 8.9% compared with January-March 2025), and imports fell to €621.6 bn (a decrease of 3.0% compared with January-March 2025).
Intra-EU trade rose to €1 068.4 bn in January-March 2026, +2.7% compared with January-March 2025.
Annex – Seasonally adjusted data
In March 2026 compared with February 2026, euro area seasonally adjusted exports increased by 2.1%, while imports increased by 3.5%. The seasonally adjusted balance was €3.5 bn, a fall compared with February (€6.5 bn).
In March 2026 compared with February 2026, EU seasonally adjusted exports increased by 1.5%, while imports increased by 3.2%. The seasonally adjusted balance was €0.1 bn, a fall compared with February (€3.6 bn).
In the first quarter of 2026 euro area exports to non euro area countries rose by 0.4%, while imports rose by 1.6%. Intra euro area trade rose by 0.7%.During the same period, EU exports to non-EU countries decreased by 0.1%, while imports rose by 1.7%. Intra-EU trade increased by 0.9%.
Click here to access the interactive charts and tables. 
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Executive summary

Before the outbreak of the conflict in the Middle East, the global economy was gaining momentum. A challenging geopolitical environment and US tariff uncertainty continued to weigh on growth, but easing inflation and a robust investment cycle related to the unfolding AI revolution provided important support. The EU economy was likewise strengthening while inflationary pressures were further abating. Weak competitiveness was a source of concern and public finances required attention, but the economy also showed resilience, including a robust labour market and solid private sector balance sheets.
The conflict materially changed this picture, delivering one of the most significant global energy supply disruptions in recent history—coming less than five years after the energy shock triggered by Russia’s war of aggression against Ukraine.
The virtual closure of the Strait of Hormuz has curtailed seaborne flows of oil and LNG by around 15% and 20%, respectively.
Moreover, the targeting of energy infrastructure in the region has caused significant damage, including to regional refining capacity. The disruption to exports of refined petroleum products has thus been particularly pronounced, reflecting the Gulf’s role as a major refining hub and the limited scope for rerouting fuel exports through alternative transport routes. Between 27 February—the eve of the US and Israeli attacks on Iran—and 29 April—the cut-off date for the technical assumptions underpinning this forecast—gas prices increased by 50% and crude oil prices by 65%, while refining margins for key products such as diesel and jet fuel reached historically elevated levels.

Global growth (excluding the EU) is now projected at 3.1% in 2026 and 3.5% in 2027. For 2026, the small downgrade with respect to the Autumn 2025 Forecast (-0.3 pps.) must be considered in the context of a stronger-than-expected momentum in the run-up to the conflict. Moreover, the aggregate figure masks significant heterogeneity across countries and regions. The outlook for the US—a major net energy exporter—has strengthened, supported by the robust AI-related investment cycle and favourable terms-of-trade. In China, growth is expected to gradually moderate amid subdued consumption. By contrast, the outlook has weakened for most energy-importing economies, especially emerging markets in Asia, reflecting their high energy intensity. Growth prospects in the Middle East and North Africa region have also weakened markedly, owing to the more direct effects of the conflict.
Both the nature of the current crisis and the economic context in which it unfolds differ in important respects from those prevailing after Russia’s full-scale invasion of Ukraine. First, at the time, Europe was heavily reliant on pipeline gas from Russia, with limited scope for substitution and strong dependence on fixed infrastructure. The abrupt disruption of gas flows led to unprecedented price spikes of fifteen to twenty times compared to the autumn 2021 levels. By contrast, the current shock affects globally traded energy commodities—oil and liquified natural gas (LNG). These markets are highly fungible, allowing supply to be reallocated across regions, spreading price pressures more evenly across the global economy. As a result, although energy prices have risen rapidly, oil and especially gas prices remain below the peak levels reached in 2021–22. Second, the EU has significantly reduced its reliance on fossil fuels, both through the expansion of renewable energy, which is weakening the pass-through from gas to electricity prices (see Box I.6.1), and a sizeable reduction in energy use by industry and households (see Special Issue 1). Finally, the EU economy entered the current crisis in a more mature and stable phase of the business cycle than in 2021-22, when the post-pandemic recovery had fuelled inflation and labour market pressures.
After reaching 1.5% in 2025, EU GDP growth is now projected to slow down to 1.1% this year—0.3 pps. lower than in the Autumn 2025 Forecast—while inflation is expected to rise to 3.1%, an upward revision of a full percentage point compared to the Autumn 2025 Forecast.
The impact of the energy shock is set to extend into 2027, with GDP growth picking up to a modest 1.4% and inflation easing to 2.4%—still some 0.3 pps. higher than projected in autumn 2025. The downward revision to growth in 2026 compared to autumn partly reflects slightly stronger-than-expected growth conditions at the beginning of 2026. Moreover, the inflation forecast for 2027 is influenced by the postponement of the roll-out of new EU Emissions Trading System (ETS2), which, in the previous forecast round, was estimated to add 0.2 to 0.3 pps. to inflation.
Futures energy prices—which underpin the technical assumptions to the forecast—point to a relatively swift, albeit partial, normalisation of supply conditions, with oil and gas prices expected to peak in the current quarter and decline to around 20% above pre-war levels by end 2027. Futures prices provide an objective and market-based benchmark for energy price assumptions in macroeconomic forecasting but are not perfect predictors of future spot prices, particularly when energy markets are affected by major disruptions and elevated uncertainty. In such circumstances, futures curves reflect not only expectations regarding future demand and supply but also changing risk premia, liquidity conditions and hedging requirements. Given the unusually high degree of uncertainty regarding the future path of energy commodity prices—and the narrowing window for a rapid normalisation of supply conditions—the baseline projections are complemented by a model-based analysis
Assessing the economic impact of a more severe and long-lasting disruption to energy supply. In such less favourable scenario, energy commodity prices are assumed to rise significantly above futures curves, peaking in late 2026 before gradually realigning with them by the end of 2027. Global growth and economic sentiment would be hit harder—further dampening the baseline’s projected easing of inflation and wiping out the rebound in real GDP projected for 2027.
While the current shock differs in many respects from the 2022 energy crisis, it is expected to transmit through the economy along similar channels. Inflation data for March and April 2026 already point to a strong surge in energy prices. Energy inflation in the EU is expected to peak above 11% in the second quarter of 2026 and remain above 10% for the rest of the year, before declining in early 2027, and turning negative from the second quarter onwards. Price pressures are set to broaden progressively, as rising energy costs feed through the production chain and are partially passed through to consumers. Agriculture, distribution, and transport services are set to be hit first. Unprocessed food inflation is expected to increase quickly before easing in 2027. The progressive spread of input and transport cost increases is likely to push up prices across all inflation components, including the non-energy intensive services. This upward pressure will be reinforced by stronger-than-previously-expected wage pressures, as workers seek to preserve purchasing power. Inflation in Central and Eastern Europe is expected to remain higher, reflecting both the region’s greater share of energy in consumption baskets and more dynamic nominal wage growth.
In response to higher inflation, the ECB and most other EU central banks are expected to tighten their monetary policy stance or, at a minimum, delay previously anticipated easing measures. Long-term interest rates have risen, and risk premia have widened, as reflected in higher spreads on some sovereign bonds. The latest bank lending survey points to tightening credit standards in the first quarter of the year, particularly for firms. At the same time, credit demand from firms and consumers has weakened, with demand for mortgages stalling. At the cut-off date of this publication, EU equity indices had recouped most of the losses recorded following the outbreak of the Middle East conflict. However, the recovery has been driven by a limited number of sectors—particularly energy and defence—while most consumer-facing firms continue to underperform. This pattern is even more pronounced in the US, where just a handful of advanced technology firms are driving a strong market rally.
Higher financing costs and weaker profits weigh on firms’ capacity to finance investment, while elevated uncertainty prompts many to postpone or scale back investment plans. Despite a strong carryover from 2025, gross fixed capital formation is now expected to grow by only 2.2% in 2026 and 2.0% in 2027—a marked deceleration from the 2.8% increase in 2025, and a downward revision compared to the Autumn 2025 Forecast (–0.5 pps. in both years). The impact is uneven across asset classes. Equipment investment is set to be hit harder, while construction is expected to prove more resilient in the near term. Housing investment typically adjusts with a lag to higher interest rates and non-residential construction continues to be supported by RRF in 2026. Other investment—including software and R&D—is expected to remain relatively resilient, expanding at around 2%.
Employment expanded by 0.5% in 2025, bringing the total number of jobs created since 2019 to around ten million. Employment growth was largely driven by rising labour market participation. However, labour market conditions had already begun to soften before the outbreak of the conflict in the Middle East (see Box I.5.1).
With employment growth now projected to slow to 0.3% in 2026 and 0.4% in 2027, the unemployment rate is expected to stabilise at around 6%. Nominal wages are set to decelerate less than previously expected in 2026, and remain sustained, growing by around 3.5% in 2027, as they adjust with a lag to higher inflation.
Productivity growth is expected to slow to 0.7% in 2026, as firms retain labour in a context of uncertain demand prospects, before recovering to 1% in 2027.
Labour income over the forecast horizon is only mildly affected in nominal terms, as stronger wage growth broadly offsets weaker employment expansion. However, the upward revision to the inflation forecast reduces growth of households’ real disposable income by 1.4 pps. over the forecast horizon. Moreover, the previous inflation episode had shown that consumers are highly sensitive to price developments, with the pre-war disinflation failing to fully translate into lower perceived inflation by the time the conflict broke out. March and April survey data show that consumer confidence has deteriorated markedly, alongside a sharp increase in their inflation expectations. As a result, precautionary saving motives and the desire to protect the real value of financial buffers are expected to lead to a small increase in the saving rate in 2026. Against this backdrop, private consumption growth is projected to decelerate to 1.1% in 2026, before picking up to 1.3% in 2027—representing downward revisions of 0.4 pps. and 0.2 pps., respectively, compared with the Autumn 2025 Forecast.
A strong starting position and early-year momentum—supported by AI-related investment and easing of trade restrictions, including lower US tariffs—underpin the global trade outlook in the short term. However, these favourable global dynamics are not expected to translate into proportional gains for EU firms, as much of the expansion in global trade remains concentrated among Asian economies. This divergence is closely linked to the weakening investment outlook within the EU, compounded by more structural factors. First, the EU’s limited presence in fast-growing, trade-intensive AI-related sectors and, second, a gradual loss of competitiveness in key products and geographic markets. Moreover, survey evidence confirms that EU firms are affected by the increasingly challenging external environment, with some responding by scaling back their presence in export markets or adjusting prices (see Box I.4.1). As a result, EU exports are expected to grow by only 0.9% in 2026, before accelerating to 2.1% in 2027. The significant downgrade with respect to autumn is largely due to weaker goods exports, while services remain resilient. Import growth is also revised down to 1.7% in 2026, less markedly than exports, as weaker domestic demand is partially offset by the stronger euro—a development that amplifies competitive pressures from trading partners, particularly China. As a result, trade is expected to detract around 0.4 pps. from domestic growth this year—slightly more than projected in autumn.
Negative terms of trade for goods, combined with market share losses, lead to a deterioration in the trade balance, with only a partial offset from the services sector. The merchandise balance is expected to decline to 1.2% of GDP in 2026 and 1.1% in 2027. Services remain more resilient, with the balance reaching around 2% of GDP. Overall, the current account surplus is projected to fall from 2.4% of GDP in 2025 to 1.7% in 2026 and 1.6% in 2027.
The EU aggregate general government deficit is projected to gradually widen over the forecast horizon, rising from 3.1% of GDP in 2025 to 3.6% in 2027. This deterioration reflects a combination of subdued economic activity, higher interest expenditure, rising defence spending and new fiscal measures that aim to shield consumers and firms from high energy prices (see Box I.9.1).
Meanwhile, public investment remains broadly stable at elevated levels. The EU debt-to-GDP ratio is also set to rise, from 82.8% of GDP at end-2025 to 85.3% at end-2027, driven mainly by higher primary deficits and an increasingly unfavourable interest-growth differential. Overall, fiscal policy is expected to be slightly expansionary in 2026—supported by the rising utilisation of EU funds as the RRF draws to a close—before turning broadly neutral in 2027.
Risks to the outlook are primarily linked to the evolution of the conflict in the Middle East and its implications for global energy markets. As shown in the scenario analysis, a prolonged conflict and more gradual supply normalisation than implied by futures markets would lead to stronger inflationary pressures and weaker growth. Moreover, a renewed period of high prices could lead households and firms to adjust consumption and investment more sharply, including through cutbacks in energy-intensive activities. Finally, while the risk of overall energy shortages appears contained, critical vulnerabilities remain for specific inputs. The Gulf region remains critically important in the production and supply of refined fuels, which are critical for transport and heating. Disruptions to the supply of helium and fertilisers could also generate knock-on effects across global production chains, including in the strategically important semiconductor industry, while weighing on food affordability.
Beyond the conflict, the outlook remains exposed to geopolitical, technological and climate-related risks. Continued uncertainty surrounding trade policies by main global players and the ensuing trade diversions, as well as the ongoing reconfiguration of geopolitical and trade relationships could disrupt crucial value chains, weighing on industrial production and employment. By contrast, a just and lasting resolution of Russia’s war of aggression against Ukraine would constitute a clear net positive for the EU and globally. Importantly, the recent softening of labour demand—evidenced by declining job vacancies and hiring rates—may prove a prelude to a sharper downturn in employment growth. The erosion of purchasing power by persistent high inflation could also put strain on social cohesion.
Climate-related shocks could further disrupt economic activity and put more pressure on food prices. Artificial intelligence represents both an upside opportunity and a source of disruption: productivity gains could support investment and growth, but job displacement could weigh on confidence (see Special Issue 2) and demand, and a significant correction of AI-related equity valuations in the US could reverberate in global financial markets.
Domestically, faster implementation of structural reforms addressing long-standing bottlenecks to EU competitiveness and growth remains the main upside risk to the outlook. Resolute progress in energy transition would further boost resilience.

Click here to access the full European Economic Forecast, Spring 2026
 
 
Compliments of the European Commission The post European Commission | Spring 2026 Economic Forecast: Slowdown in Growth as Energy Shock Drives Up Inflation first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Blog | The economic shock caused by the war between the United States and Iran has quickly fed into euro area firms’ expectations. Daily responses to an ECB survey show an immediate increase in expected input costs, selling prices and short-term inflation.
Firms’ expectations for costs, prices and the broader macroeconomic environment are central to their decisions on wages, investment and employment. These decisions, in turn, determine how economic shocks are transmitted to the economy. When a major geopolitical event occurs, a key question for central banks is how quickly and how persistently the shock will feed into firms’ expectations. For monetary policy, it is essential to understand whether the adjustment to the shock is a short-lived supply disruption or a longer-lasting change that might lead to medium-term inflationary pressures.
The latest round of the ECB’s Survey on the Access to Finance of Enterprises (SAFE), offers a rare opportunity to study exactly this question. The survey for the first quarter of 2026, carried out between 19 February and 1 April, spans the period including the outbreak of the war in the Middle East on 28 February. What makes the survey results particularly interesting is the fact that the interviews with firms were carried out in different weeks throughout this period. This makes it possible to compare the answers of firms interviewed before and after the start of the conflict. Thereby, it provides evidence for the way the geopolitical shock has been transmitted to firms’ expectations.[1] Most strikingly, the results indicate an immediate increase in expected input costs, selling prices and short-term inflation.
Impact on costs and selling prices one year ahead
Chart 1 provides a first glimpse of the impact of the war on euro area firms’ expectations for costs and selling prices over the next 12 months. It displays weekly averages of SAFE responses collected before and after 28 February 2026, and points to a clear shift in sentiment. In the two weeks prior to the outbreak of the war, firms expected their selling prices and non-labour input costs to increase on average by 3.0% and 3.9% respectively. These figures were broadly in line with those in the previous survey round (2.9% and 3.6%).[2] This suggests that without the war, expectations would likely have remained on a similar, stable path.
Chart 1
Expectations for selling prices, wages and input costs one year ahead, before and after the outbreak of the war in the Middle East

(percentage changes over the next 12 months)

Sources: Survey on the Access to Finance of Enterprises and authors’ calculations.
Notes: The chart shows average expectations of firms over the following 12 months, before and after the outbreak of the war in the Middle East. The survey results are aggregated on a weekly basis.

Following the outbreak of the war, however, both cost and price expectations rose markedly. For firms surveyed after 28 February, weekly averages climbed progressively, reaching a peak of 4.1% for the expected change in selling prices and 7.7% for input costs in the final weeks of the collection period. This pattern mirrors the sharp and sizeable rise in energy prices at that time and the intensification of the conflict. Wage cost expectations, by contrast, moved modestly in the opposite direction, declining from 3.0% before the outbreak to 2.8% afterwards.
The rise in input cost expectations was not the same in all sectors. Firms operating in industries that rely more on fossil energy anticipated the sharpest cost increases over the next 12 months. The largest increases were expected by construction and transportation, both with high fossil fuel consumption (Chart 2). This pattern suggests that revised expectations were closely linked to firms’ exposure to energy price fluctuations triggered by the war. It also raises the possibility that firms in energy-intensive industries may have made bigger adjustments to their expectations not only for costs but also for business activity and financing conditions – a result we explore in more detail later in the post.

Chart 2
The relationship between input cost expectations and fossil energy consumption

(x-axis: percentage of fossil energy in total energy consumption, y-axis: percentage change in input costs over the next 12 months)

Sources: Survey on the Access of Finance of Enterprises, Moody’s Orbis database, Eurostat industry energy consumption statistics and authors’ calculations.
Notes: The chart shows survey-weighted average expectations of euro area firms for changes in input costs over the next 12 months, aggregated at the NACE 2-digit sector level. The sample includes only sectors with at least 100 firms that can be matched to the Orbis database. The horizontal axis shows the share of fossil energy in total energy consumption by sector, based on Eurostat industry energy consumption statistics.

Impact on inflation expectations
The war has also left a mark on the way euro area firms perceive the short-term inflation outlook. Chart 3 offers a straightforward way to read the impact of the war on inflation expectations for one, three and five years ahead. It compares the median inflation expectation reported by firms surveyed in the two weeks before the attack on 28 February with the median reported after that date. If the war had had no effect on inflation expectations, one would expect the two lines to overlap across the three horizons. Instead, the chart reveals a more nuanced picture. It shows a clear upward shift at the one-year horizon, while expectations for three and five years ahead are broadly unchanged. This indicates that firms currently see the impact on inflation as temporary.
The survey results bear this out. Firms interviewed before the outbreak of the war reported a median one-year ahead inflation expectation of 2.5%, almost unchanged from the previous survey round. Among firms surveyed after 28 February, this figure rose to 3.0%. This suggests that the war and the associated rise in energy prices and supply disruptions had prompted a substantial upward revision to short-term inflation expectations. Three-year and five-year ahead median inflation expectations, by contrast, were similar across the two groups. This indicates that firms did not, at this stage, expect the inflationary impulse to persist over the medium to longer term.

Chart 3
Firms’ inflation expectations before and after the outbreak of the war in the Middle East at different horizons

(annual percentages)

Notes: The chart shows survey-weighted median expectations for euro area inflation in one year, three years and five years’ time. “before the war outbreak” refers to SAFE survey data from the Q1 2026 round collected between 19 February and 27 February 2026, and “after the war outbreak” refers to Q1 survey data collected between 28 February and 1 April 2026.

Impact on expectations for near-term business activity and bank loan availability
The impact of the war has not been confined to firms’ cost and price expectations. It has also dampened their short-term expectations for business activity and access to finance. Chart 4 compares the net percentages of firms expecting turnover, investment and bank loan availability to improve over the next three and six months between those surveyed before and after the outbreak of the war. Across all three indicators, firms interviewed after 28 February reported a noticeably more pessimistic outlook than those surveyed beforehand, consistent with the broader uncertainty brought by the conflict.

Chart 4
Firms’ expectations for business activity and bank loan availability over the next three and six months

(net percentages of respondents)

Notes: The chart shows survey-weighted net percentages of euro area firms’ expectations for changes over the next six months (bars) and over the next three months (diamonds), before and after the outbreak of the war in the Middle East. “Before the war outbreak” refers to SAFE survey data from the Q1 2026 round collected between 19 February and 27 February 2026, and “after the war outbreak” refers to Q1 survey data collected between 28 February and 1 April 2026. Net percentages are the difference between the percentage of enterprises reporting an increase for a given factor and the percentage reporting a decrease.

The shift in firms’ expectations for credit conditions is particularly striking. Firms surveyed before the war anticipated, on balance, an improvement in bank loan availability over the coming six months, with a net 6% expecting conditions to ease. Among firms surveyed after the outbreak, sentiment had reversed, with a net 6% expecting the availability of bank loans to decrease. This reversal underscores the potential for geopolitical instability to make lenders more risk-averse. Unless the conflict is resolved quickly, it signals a challenging environment for firms seeking external financing in the near future. The chart also highlights differences between shorter-term (three-month) and medium-term (six-month) expectations. While firms reported a more pessimistic outlook for turnover and bank loan availability across both reference periods after the outbreak of the war, their investment plans deteriorated only at the six-month horizon. Expectations for three months ahead were broadly unchanged. Taken together, these findings suggest that the conflict has led firms to reassess their near-term business outlook, while adjustments to investment plans have so far remained more limited and concentrated at longer horizons.
Energy-intensive firms become more pessimistic
The aggregate deterioration in firms’ expectations masks substantial differences across sectors. Chart 5 shows that the worsening of sentiment following the outbreak of the war was driven by firms in energy-intensive sectors, although the size of the change differs across expectation measures.

Chart 5
Change in expectations for employment, turnover, investment and bank loan availability by firms’ energy intensity

(percentage marginal probability of an increase in expectations)

Sources: Survey on the Access to Finance of Enterprises, Moody’s Orbis database, Eurostat industry energy consumption statistics and authors’ calculations.
Notes: The chart shows the marginal effect of the coefficients from an ordered probit model for the outcome “increase” in expectations for employment, turnover, investment and bank loan availability. The coefficient measures the difference between the firms surveyed before and after the war in the Middle East, multiplied by a dummy for high-energy intensity sectors (energy consumption divided by gross value added above the median across countries and NACE 2-digit sectors). The regressions use survey weights and combine in the sample firms interviewed about their one-quarter and two-quarter ahead expectations. Expectations for employment are over the next 12 months.

For employment and turnover expectations, the adjustment among energy-intensive firms is statistically significant, particularly for turnover. By contrast, there is no significant effect on investment expectations over the next three to six months.[3] This suggests that energy-intensive firms have a less optimistic outlook for revenues as a result of the conflict and the associated rise in energy costs, but they have barely adjusted their investment plans for the time being. This may reflect the longer-term nature of investment decisions, as firms typically revise their plans only when a shock is perceived to be persistent. Overall, the concentration of the adjustment among energy-intensive firms provides additional indication that the geopolitical shock has mainly operated through the energy price channel.
Finally, the deterioration in sentiment has also extended to financing conditions. Energy-intensive firms became significantly more pessimistic about bank loan availability after the US-led attack on Iran. This suggests that rising energy costs and weaker expected profitability translated into concerns about future access to external financing, potentially reflecting a tighter supply of bank credit for firms facing cash flow constraints. This result points to a potential amplification mechanism, whereby energy price shocks not only weaken firms’ activity outlook directly but also by tightening expected financing conditions.
Conclusion
The pattern emerging across all four expectation dimensions collected in the survey – input and wage costs, selling prices, inflation expectations and business activity – bears the hallmarks of a supply-driven shock. Firms have revised up their short-term cost, price and inflation expectations while simultaneously marking down their near-term outlook for turnover, employment, investment and access to finance. Importantly, the deterioration in sentiment has been concentrated among firms operating in energy-intensive sectors. This highlights the central role of the energy price channel in the transmission of the shock. At the same time, the stability of wage expectations and longer-term inflation expectations suggests that, so far, firms do not anticipate the shock becoming persistent.
The views expressed in each blog entry are those of the author(s) and do not necessarily represent the views of the European Central Bank and the Eurosystem.
 
 
Compliments of the European Central Bank The post ECB | How the War in the Middle East is Reshaping Euro Area Firms’ Expectations first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The Council decided today to suspend for one year customs tariffs on key nitrogen-based fertilisers used in agricultural production in the EU, including fertiliser inputs such as urea and ammonia.
The measure aims to lower costs for EU farmers and fertiliser industry – saving them an estimated €60 million in import duties, according to the European Commission. It will also reduce the EU’s dependency on Russia and Belarus for fertiliser products and help build a more diversified trading network in this area.
“Today’s decision gives European farmers better access to affordable, reliable fertiliser supplies – good news for the agriculture sector and EU consumers alike. At the same time, we are accelerating away from Russian and Belarusian products and building more resilient supply chains and partnerships globally.” – Makis Keravnos, Minister of Finance of the Republic of Cyprus
In practice, the suspension will apply only to products not already imported into the EU duty-free from countries that have preferential access under most favoured nation (MFN) tariffs. However, to balance the interests of EU producers, the measure is limited to a quota of goods equal to the volume of MFN imports in 2024 plus 20% of the volumes imported from Russia and Belarus in the same year.
In practice, the suspension will apply only to products not already imported into the EU duty-free from countries that have preferential access under most favoured nation (MFN) tariffs. However, to balance the interests of EU producers, the measure is limited to a quota of goods equal to the volume of MFN imports in 2024 plus 20% of the volumes imported from Russia and Belarus in the same year.
The EU has decided that the suspension will not apply to products imported from Russia due to its unprovoked and unjustified war of aggression against Ukraine. Nor will it apply to products imported from Belarus given its support for Russia, and its disregard for international law, fundamental freedoms and human rights.
Next steps 
The measure will enter into force the day after its publication in the EU’s official journal and will apply until one year later. The Commission is expected to monitor the fertiliser market and, if necessary, propose the extension or the modification of the suspension.
Background
Fertilisers are essential for European farmers who need a secure and regular trade flow at competitive prices to guarantee agricultural production and food security. Prices of those products have increased substantially since 2021, in turn increasing the price of food and putting the agricultural production under pressure.
In 2024, the EU imported 2 million tonnes of ammonia and 5.9 million tonnes of urea, notably to produce nitrogen fertilisers. In addition, the Union imported 6.7 million tonnes of nitrogen-based fertilisers and mixtures containing nitrogen.
The EU already imports a significant portion of nitrogen-based fertilisers duty-free from countries benefitting from preferential access to the Union market. Despite this, the Union still imports a large volume of these goods originating in countries subject to the common customs tariff, with customs duty rates currently ranging between 5.5% and 6.5%.
 
 
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