Euro area: Resilience despite the Iran war

Research evidence excerpt

Euro area: Resilience despite the Iran war

Global Markets Research

30 July 2026First Insights

Economics - Global

Research Analysts

Euro area: Resilience despite the Iran war European Economics

Andrzej Szczepaniak - NIplc

• The euro area economy was resilient in H1 2026 despite the Iran war, with GDP andrzej.szczepaniak@nomura.com

(excluding Ireland) growing by 0.3% q-o-q in each quarter. This growth rate is in line +44 (0) 20 7102 3167

with the plausible range of estimates for potential economic growth in the euro area. George Buckley - NIplc

george.buckley@nomura.com

• We continue to believe euro area HICP inflation for July will be unchanged at 2.8% y- +44 (0) 20 7102 1800

o-y, following country-level data released today (and assuming our forecasts for

Josie Anderson - NIplc France and Italy materialise).

josie.anderson@nomura.com

• The ECB can take comfort in the euro area’s economic resilience. We forecast the +44 (0) 20 7102 4284

ECB to raise rates again in September, lifting the depo rate by 25bp to 2.50%. The

path for monetary policy beyond September is largely dependent on the longevity and

severity of the Iran war.

Solid domestic demand despite the Iran war

Euro area GDP for Q2 2026 grew by 0.4% q-o-q, despite possible headwinds due to the

Iran war, and after no growth in Q1. The expenditure breakdown is not released until 7

September. However, country-level details, where available, suggest underlying domestic

demand was an important driver of economic growth, as well as Ireland. We estimate

Ireland contributed 0.1pp to the euro area aggregate figure and that euro area GDP

growth excluding Ireland was 0.3% q-o-q.

Euro area GDP growth excluding Ireland has been pretty stable at around 0.3% q-o-q

since the start of 2025 (Figure 1).