Category: 3. Business

The head of the International Monetary Fund has warned that the Iran war will permanently scar the global economy even if a durable peace deal in the Middle East can be reached.

In a speech delivered as the ceasefire in the conflict threatened to unravel, Kristalina Georgieva said the “scarring effects” caused by the war to date would mean slower global growth this year than first anticipated.

Had it not been for the outbreak of the conflict six weeks ago, the IMF would have upgraded its global growth outlook for 2026, Georgieva said. “But now, even our most hopeful scenario involves a growth downgrade. Even in a best case, there will be no neat and clean return to the status quo.”

Six weeks into the conflict, the fate of the conditional ceasefire announced late on Tuesday appears at risk as Washington and Tehran disagree on what was agreed.

The global oil price rose on Thursday amid volatile conditions in global financial markets, underscoring fears over continued disruption to energy supplies through the strait of Hormuz that are key for fuelling the world economy.

In a speech intended as a curtain-raiser for the IMF’s annual spring meetings in Washington next week, Georgieva said there was heightened uncertainty over the depth of the global slowdown triggered by the war.

However, every scenario the body has produced for its flagship World Economic Outlook report – to be published on Tuesday – shows a permanent hit to living standards.

Last autumn the IMF had forecast global growth of 3.1% in 2026, in a modest slowdown from growth of 3.2% in 2025, as an AI-driven investment boom helped to power “unexpected resilience” despite Donald Trump’s tariff wars.

Georgieva said the world economy had entered the Iran war with “considerable momentum” fuelled by tech investment and supportive conditions in financial markets.

However, she said infrastructure damage, supply disruptions, losses of confidence, and other scarring effects linked to the war would inflict losses for the global economy regardless of whether a peace deal could be reached.

Highlighting uncertainty over shipping in and out of the Gulf, and the amount of time it would take to restore production at bombed-out oil and gas facilities across the region, the IMF’s managing director said the world was braced for continuing disruption.

“The fact is, we don’t truly know what the future holds for transits through the strait of Hormuz or, for that matter, for the recovery of regional air traffic.” she said. “What we do know is that growth will be slower – even if the new peace is durable.”

In a sign that there would be steeper growth downgrades for some countries than for others, Georgieva said net oil-importing nations, poorer countries and small-island nations would be hit particularly hard. However, she urged governments around the world to “reject go-it-alone actions” such as export and price controls.

“That can further upset global conditions: don’t pour gasoline on the fire,” she said.

With many countries entering the crisis with elevated levels of debt and higher borrowing costs, the IMF chief urged governments to focus on targeted and temporary support measures for the most vulnerable households.

Costly, blanket tax cuts or energy subsidies could risk stoking inflation while threatening to undermine fragile public finances, she said. Central banks should also tread carefully by keeping interest rates on hold, but stand ready to act to curb inflation.

“All countries must deploy their limited fiscal resources responsibly, and most must move decisively to rebuild space after this shock. I cannot emphasise this enough,” she said.

Her comments came as the Bank of England governor, Andrew Bailey, said the global economy faced a “very big shock” from the war.

Bailey, who also chairs the Financial Stability Board, an international body that monitors the financial system, told the EU parliament’s committee on economic and monetary affairs that risks remained while the Middle East situation remained volatile.

“We’ve obviously had a very big shock in the last month or so, with the conflict breaking out in the Middle East, that has prompted, obviously, much greater market volatility,” he said.

“I mean, we all have to get up in the morning and find out what’s gone on overnight. At least we got up yesterday and found the world was still with us, but it obviously is very volatile. Yesterday was a good day in point to illustrate that.”

9 April 2026

In the week ending 3 April 2026 the increase of EUR 113.2 billion in gold and gold receivables (asset item 1) primarily reflected quarterly revaluation adjustments.

The net position of the Eurosystem in foreign currency (asset items 2 and 3 minus liability items 7, 8 and 9) rose by EUR 4.9 billion to EUR 340.1 billion. This change was due mainly to the effects of the quarterly revaluation of assets and liabilities.

The net balance of open market operations and standing facilities (asset item 5 minus liability items 2.2, 2.3, 2.4, 2.5 and 4) increased by EUR 26.1 billion to -EUR 2,306.9 billion.

Base money (liability items 1, 2.1 and 2.2) decreased by EUR 24.7 billion to EUR 4,123.9 billion.

The table below provides the detailed breakdown of securities held for monetary policy purposes (asset item 7.1) into the different portfolios. All debt securities held in these portfolios are accounted for at amortised cost.

Quarter-end revaluation of the Eurosystem’s assets and liabilities

In line with the Eurosystem’s harmonised accounting rules, gold, foreign exchange and financial instruments (including part of the securities holdings not purchased for monetary policy purposes) are revalued at market rates and prices as at the end of each quarter.

The net impact of the revaluation on each balance sheet item as at 3 April 2026 is shown in the additional column “Difference compared with last week due to quarter-end adjustments”. The gold price and the principal exchange rates used for the revaluation of balances were as follows:

Gold: EUR 3,993.651 per fine oz.

USD: 1.1498 per EUR

JPY: 183.39 per EUR

CNY: 7.9341 per EUR

Special drawing rights: EUR 1.1816 per SDR

The content and format of the weekly financial statement are set out in Annexes IV to VI to Guideline (EU) 2024/2941 of the European Central Bank of 14 November 2024 on the legal framework for accounting and financial reporting in the European System of Central Banks (ECB/2024/31).

Core inflation held above the Federal Reserve’s target before the recent surge in energy prices, according to a key gauge released Thursday that offers the central bank a snapshot of conditions leading into the Iran war.

The core personal consumption expenditures price index, which excludes food and energy, rose a seasonally adjusted 3% in February, the Commerce Department reported. The all-items headline inflation measure increased 2.8%.

Both readings were in line with the Dow Jones consensus. The core annual inflation rate was 0.1 percentage point lower than in January while headline was unchanged.

On a monthly basis, both core and headline prices rose 0.4%, also meeting forecasts.

The Fed uses the PCE price index as its primary yardstick and forecasting tool for inflation. The Fed, which targets 2% inflation, sees core as a better indicator of longer-term trends.

In addition to the inflation readings, the report also showed consumer spending unexpectedly down 0.1% on the month, while personal income rose 0.4%. Economists had expected spending to rise 0.6% with income up 0.4%.

Separately, the Commerce Department reported that economic growth was even slower than previously reported for the fourth quarter of 2025.

Gross domestic product, a measure of all goods and services produced, rose just 0.5% on a seasonally adjusted annualized rate, down from the prior reading of 0.7% and the initial estimate of 1.4%. The full-year growth rate held at 2.1%.

The department said the downward revision came primarily to lower investment than previously indicated. A key metric for demand, called real final sales to private domestic purchasers, was cut to a 1.8% growth rate, down 0.6 percentage point from the first estimate.

“February prices were in line but income was weak and GDP was revised down again. That means stagflation was a little worse than expected even before the Iran war started,” said David Russell, global head of market strategy at TradeStation. “Parallels to the 1970s might be growing as investors assess this fragile ceasefire.”

The inflation data covers the period before the war the U.S. and Israel launched against Iran, so it doesn’t reflect the massive surge in energy prices that took effect during the conflict. Oil prices at one point climbed over $100 a barrel while prices at the pump surged by more than $1 a gallon.

While the data is somewhat dated, it does provide a view of underlying conditions prior to the war. Fed officials generally look through those types price surges, viewing them as temporary and not representative of broader trends.

Most Fed officials have been cautious publicly about committing to positions regarding interest rates as they watch events unfold. Minutes from the March Fed meeting, released Wednesday, showed policymakers worried about both sides of their dual mandate for stable prices and low unemployment, though generally inclined to lower rates later this year.

At the same time, markets expect the Fed to stay on hold as the labor market has slowed but has created enough jobs to keep the unemployment rate steady. A Labor Department report Thursday showed a rise in jobless claims to a seasonally adjusted 219,000, up 16,000 from the prior period. The total was higher than the 210,000 estimate but largely in line with recent trends.

Inflation has been above the Fed’s goal for five years, though officials have continued to express confidence that it will continue on a gradual path lower.

A more current look at prices will come Friday when the Bureau of Labor Statistics releases the March reading for the consumer price index. The consensus estimate is that headline prices surged 0.9% for the month, pushing the inflation rate to 3.3%, or nearly a full point higher than February. Core CPI is projected at 0.3% monthly and 2.7% annually.

On March 4, 2026, the European Commission (EC) published a proposal for an Industrial Accelerator Act (IAA) — an ambitious framework designed to reinforce the EU’s industrial base while accelerating decarbonization in key sectors. The proposal combines into a single regulatory package industrial policy, climate ambition, and economic security tools, to steer investment and demand across strategic value chains. Core measures include (1) promoting EU-origin and low-carbon products, (2) restricting foreign investments in strategic sectors, and (3) simplifying permitting and creating dedicated industrial manufacturing acceleration zones to speed up industrial deployment. If adopted, the IAA could significantly reshape the operating environment for strategic manufacturing sectors, including automotive, net-zero technologies (such as batteries and solar), and critical raw materials.

Key Takeaways

• Map exposure across value chains: The IAA brings together several policy priorities — economic resilience, industrial competitiveness, climate transition, and supply-chain security. The proposal targets all industrial manufacturing sectors but focuses on strategically important areas, including energy-intensive industries (chemicals, rubber, plastics, basic metals, nonmetallic minerals, paper, and refined petroleum products); carbon-intensive industrial materials (steel, aluminum, concrete, mortar, and other products whose performance depends mainly on these); net-zero technologies (such as batteries, solar, wind, nuclear, and renewable energy technologies); automotive, including electric vehicles; and critical raw materials. Given the breadth of these sectors, the IAA could affect large segments of industrial value chains. Companies should begin assessing where their procurement, production, and sales activities may intersect with the new rules.
• Assess implications for investment strategies: The IAA seeks to support the expansion of EU manufacturing capacity by promoting industrial investment. However, it introduces stricter conditions for foreign investments in key emerging sectors such as batteries, electric vehicles, solar technologies, and critical raw materials. Large investments in these sectors would require prior approval and need to satisfy conditions relating to, among others, foreign ownership caps, workforce development, research-and-development (R&D) commitments, and value-chain integration in the EU. Non-EU investors (and EU companies in affected sectors seeking foreign capital) should begin stress-testing investment and deal structures against these potential requirements. These new rules would apply alongside existing foreign direct investment (FDI) screening regimes.
• Prepare “origin + carbon” documentation: The IAA also seeks to stimulate demand for EU-origin and low-carbon products, particularly in public procurement procedures and public support schemes. Companies will increasingly need to demonstrate both the origin and carbon intensity of their products. Companies should strengthen internal processes for supply-chain traceability, emissions accounting, and documentation, as these will likely become essential eligibility requirements.
• Engage early in the legislative process: The EC’s proposal marks only the first stage of the EU legislative process. The text will now be examined by the European Parliament and the Council of the European Union (Council), and substantial amendments remain possible. During this phase, businesses and trade associations will have opportunities to engage with policymakers, build sector coalitions, and shape the final design of the IAA and its implementing measures.

Overview of the IAA’s Core Measures

The IAA aims to strengthen EU industrial competitiveness while accelerating decarbonization through measures in three main areas: (1) restrictions on foreign investments in strategic sectors, (2) promotion of EU-origin and low-carbon products, and (3) permitting simplification and industrial manufacturing acceleration areas. Below, we summarize the main elements of each.

1) Restrictions on foreign investments in emerging strategic manufacturing sectors

• Acquisitions of EU companies or assets and greenfield investments in certain emerging strategic manufacturing sectors by non-EU investors (including EU companies ultimately owned or controlled by non-EU persons) would require prior approval where the investment value exceeds €100 million and the investor is from a third country that holds more than 40% of the global manufacturing capacity in the relevant sector. The EC should monitor global capacity and publish results to guide the application of this threshold. The regime would apply to the following sectors: (1) battery technologies and battery energy storage value chains; (2) electric and hybrid vehicles, including electrification and digitalization components; (3) solar PV technologies; and (4) extraction, processing, and recycling of critical raw materials.
• To be approved, investments would need to satisfy at least four of the six conditions: (1) foreign ownership cap of 49%; (2) joint venture with EU partners; (3) licensing of relevant intellectual property or know-how to the EU target; (4) minimum R&D expenditure commitments; (5) EU workforce requirements (at least 50% employees) and training commitments; and (6) EU value chains enhancement, including sourcing at least 30% of inputs from EU suppliers. The EU workforce requirement is mandatory.
• Before implementing their investment, investors would need to seek approval from the competent Member State authorities, which should verify compliance with the above conditions. Nonetheless, the EC would retain significant monitoring powers:
  • Member States must inform the EC of all notified investments.
  • The EC may issue an opinion on compliance with the IAA. Member States must take into account the EC’s opinion in their final decision.
  • The EC may directly intervene in the assessment for particularly significant investments, such as those exceeding €1 billion, affecting multiple Member States, or security of supply or environmental effect risks.
• Failure to comply with these rules may result in investment prohibitions or monetary penalties. This regime would go beyond traditional national security FDI screening (which will continue to apply in parallel) by linking market access to demonstrable economic value creation within the EU.

2) Promotion of EU-origin and low-carbon products

• EU Member State authorities would be required to prioritize EU-origin and low-carbon products in public procurement processes and public support schemes relating to energy-intensive industries, electric vehicles, and net-zero technologies. Key mechanisms:
  • Excluding from tenders operators from third countries that are not party to international agreements with the EU providing for procurement access commitments (e.g., the World Trade Organization Government Procurement Agreement or other regional or bilateral agreements). This is expected to affect such countries as Brazil, China, India, Indonesia, Malaysia, Russia, and Thailand.
  • Limiting access to certain public support schemes for suppliers considered high-risk from a cybersecurity perspective.
  • Applying targeted EU-origin and low-carbon requirements in public procurement and support schemes, unless compliance would result in disproportionate costs or technical incompatibilities.
• The IAA sets out detailed EU-origin and low-carbon thresholds for several product categories, including carbon-intensive industrial materials, electric vehicles, and net-zero technologies. Examples in public procurement include steel and aluminum should contain at least 25% low-carbon content; aluminum should contain at least 25% EU-origin content; electric vehicles should be assembled in the EU with EU-origin components that represent at least 70% of their value (excluding batteries); and solar photovoltaic (PV) technologies should, among others, incorporate EU-origin PV inverters and cells.
• EU origin would be based on customs origin rules, with some exceptions. Low-carbon products should be defined by reference to greenhouse gas intensity standards derived from existing EU Emission Trading System and Carbon Border Adjustment Mechanism frameworks. In practice, these rules would make product traceability and carbon data management critical for companies seeking access to procurement markets and public support schemes.

3) Permitting simplification and industrial manufacturing acceleration areas

• The IAA sets out various measures aimed at speeding up industrial deployment across the EU:
  • Member States would need to establish single digital access points and unified permit-granting procedures for industrial manufacturing projects in any sector (except for tobacco).
  • Member States would need to designate at least one industrial manufacturing acceleration zone, designed to cluster manufacturing projects, particularly in energy-intensive industries, automotive, and net-zero technologies. Within these areas, Member States should facilitate coordinated infrastructure development, faster permitting, improved access to financing, R&D support, and innovation ecosystems.
•  These reforms aim to reduce administrative fragmentation, increase regulatory certainty, and, overall, reduce lead times for major industrial projects.

What Comes Next


The EC’s proposal now enters the EU ordinary legislative procedure, where it will be examined by the European Parliament and the Council. Negotiations could take many months, and significant amendments are possible given the political sensitivity of measures relating to industrial policy, trade, and foreign investment. Nonetheless, the overall policy direction is clear: The EU is moving toward a more assertive industrial strategy aimed at strengthening domestic manufacturing capacity, securing supply chains, and accelerating green transition. Companies operating across the affected sectors should therefore closely monitor the legislative process and begin preparing for potential implementation.

The second list of Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs) has been published in the Official Journal of the European Union today.  It outlines 235 selected cross-border energy infrastructure projects that will strengthen energy connectivity across the continent, bringing nearer the completion of the Energy Union. Once in force, in 20 days time, it will formally replace the 1st Union List of PCIs and PMIs.

The projects on the list will benefit from streamlined permit-granting and regulatory support and will be eligible to apply for EU financing from the Connecting Europe Facility (CEF). The new projects will be able to apply for EU funding when the Commission launches the 2026 CEF call at the end of April 2026, with the deadline for applications at the end of September 2026.

Out of the 235 selected PCIs and PMIs, nearly half (113) are electricity, offshore and smart electricity grid projects that will be essential for integrating the growing share of renewables. 100 hydrogen and electrolyser as well as 3 smart gas grids projects are included in the list to help decarbonise EU industry and transport and replace the use of natural gas in the EU, further decreasing our dependency on fossil fuel imports. The list also features 17 CO₂ network projects in line with EU goals to create a market for carbon capture and storage.

The Commission will support the implementation of these projects through stepped-up political coordination with the Member States concerned, drawing on the regional High-Level Groups designed to support energy infrastructure development in key regions, including with partner countries, as well as the Energy Union Task Force.

Ensuring a well-integrated and optimised European energy grid is crucial to accelerating a cost-efficient and clean energy transition. The 2^nd Union list of PCIs and PMIs, together with the European Grids Package and the Energy Highways Initiative will further accelerate the development of the necessary energy infrastructure in Europe and will urgently tackle cross-border energy infrastructure bottlenecks and increase the overall resilience of the EU’s energy system.

Background

PCIs are designed to complete the EU energy market and contribute to climate-neutrality objectives, ensuring that all Europeans have access to affordable, reliable, and renewable energy. PMIs encompass cross-border infrastructure between EU and non-EU countries, contributing to the EU’s energy and climate goals, including its recently adopted Global Vision.

The list published today in the Official Journal is the second Union list of PCIs and PMIs established under the revised TEN-E Regulation, in force since June 2022. The publication of the list follows the end of the scrutiny period for the Council and the European Parliament, which confirmed their support for the list.

The Connecting Europe Facility (CEF-Energy) instrument has provided €8.7 billion for flagship projects since 2014. A prime example of cross-border landmark projects is the Baltic synchronisation, through which the Baltic states have regained independence from Russia’s electricity grid, fully embedding the three countries in the EU energy system. As part of the 2028-2034 Multi-annual Financial Framework, the Commission proposed a five-fold increase of the CEF Energy budget from €5.84 billion to €29.91 billion.

Related links

9 April 2026

• Households’ financial investment increased at unchanged annual rate of 2.5% in fourth quarter of 2025
• Non-financial corporations’ financing grew at unchanged annual rate of 1.5%
• Non-financial corporations’ gross operating surplus increased at higher annual rate of 4.3%, compared to 3.5% in previous quarter

Data for household financing and financial and non-financial investment

Data for NFC gross-operating surplus, non-financial investment and financing

Households

Household gross disposable income increased at a higher annual rate of 3.3% in the fourth quarter of 2025 (after 2.9% in the previous quarter). Compensation of employees grew at a lower rate of 4.2% (after 4.6%), and gross operating surplus and mixed income of the self-employed increased at a lower rate of 2.1% (after 2.4%). Household consumption expenditure grew at a higher rate of 3.6% (after 3.1%).

The household gross saving rate remained at 14.9% in the fourth quarter of 2025, unchanged from the previous quarter.

Household gross non-financial investment (which refers mainly to housing) increased at a higher rate of 7.1% (after 4.6% in the previous quarter). Loans to households, the main component of household financing, grew at a higher rate of 2.7% (after 2.5%).

Household financial investment increased at an unchanged rate of 2.5% in the fourth quarter of 2025. Among its components, currency and deposits (3.0%, after 3.2%) as well as investment in shares and other equity (2.0%, after 2.3%) grew at lower rates, while investments in debt securities (2.7%, after ‑0.5%) and in life insurance (2.6%, after 2.3%) increased at higher rates. Investment in pension schemes grew at an unchanged rate (2.6%).

Household net worth grew at an unchanged annual rate of 4.7% in the fourth quarter of 2025. The growth in net worth was due to continued valuation gains in financial and non-financial assets in addition to new net investments. Housing wealth, the main component of non-financial assets, grew at a lower rate (4.6%, after 5.1%). The household debt-to-income ratio decreased to 81.3% in the fourth quarter of 2025, from 81.7% in the fourth quarter of 2024.

Non-financial corporations

Net value added by NFCs increased at a broadly unchanged annual rate of 4.4% in the fourth quarter of 2025. Gross operating surplus grew at a higher rate (4.3%, after 3.5% in the previous quarter), and net property income, defined in this context as property income receivable minus interest and rent payable, also increased at a higher rate (0.5%, after 0.1%). As a result, gross entrepreneurial income (broadly equivalent to cash flow) grew at a higher rate (3.7%, after 3.1%).^[1]

NFCs’ gross non-financial investment increased at a lower annual rate of 1.3% (after 6.5%).^[2] Financial investment grew at a broadly unchanged rate of 2.1%. Among its components, loans granted increased at a lower rate of 2.3% (after 2.6%), while investments in currency and deposits (3.7%, after 3.5%) and in shares and other equity (1.1%, after 0.9%) grew at higher rates.

Financing of NFCs increased at an unchanged annual rate of 1.5% in the fourth quarter of 2025. Net issuance of debt securities (3.2%, after 2.4%) and loan financing^[3] (2.4%, after 2.2%) both grew at higher rates, while trade credit financing increased at a lower rate (3.9%, after 4.7%). Equity financing grew at an unchanged rate (0.7%).

NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 65.6% in the fourth quarter of 2025, from 67.0% in the same quarter of the previous year; the non-consolidated, wider debt measure decreased to 135.7%, from 138.0%.

For queries, please use the Statistical information request form.

Notes:

• This statistical release incorporates revisions to the data since the first quarter of 2022.
• The annual growth rate of non-financial transactions and of outstanding assets and liabilities (stocks) is calculated as the percentage change between the value for a given quarter and that value recorded four quarters earlier. The annual growth rates used for financial transactions refer to the total value of transactions during the year in relation to the outstanding stock a year before.
• The euro area and national financial accounts data of NFCs and households are available in an interactive dashboard.
• Hyperlinks in the main body of the statistical release are dynamic. The data they lead to may therefore change with subsequent data releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.
• The ECB publishes experimental Distributional Wealth Accounts (DWA) which provide additional breakdowns for the household sector. The release of results for 2025 Q4 will take place on 29 May 2026.