The Euro Area GDP expanded by 0.8% from the previous year in the first quarter of 2026, below expectations of a 0.9% growth rate and dropping from the 1.3% last quarter to mark the softest pace of expansion since the second quarter of 2022. The slowdown was aligned with the energy crunch from the Middle East following the outbreak of war in the region, which triggered surges in the cost of major energy goods since the start of March. Lower household consumption was noted among the largest economies of the bloc, with growth slowing for France (1.1% vs 1.3% in 2025Q4), Germany (0.3% vs 0.4%), Italy (0.7% vs 0.9%), and the Netherlands (1.2% vs 1.8%). Spain remained the outperformer in GDP growth, expanding 2.7% from the 2.6% last quarter.