The Eurozone economy expanded 0.3% yoy in Q1 2026, well below the previously estimated 0.8% and down from 1.2% in Q4 2025. This marks the weakest expansion since Q4 2023, reflecting pressures from tight energy supplies and higher inflation linked to the Middle East conflict. There was a sharp slowdown in gross fixed capital formation (0.3% vs 3.3% in Q4), alongside a decline in exports (-0.9% vs 2.1%). Household consumption also moderated (1.1% vs 1.3%), while government spending accelerated (2.3% vs 1.5%). Imports increased at a slower pace (1.9% vs 3.8%). At the country level, Ireland saw a sharp contraction (-16.8% vs 2.9% in Q4), while Germany posted the weakest growth among major economies at 0.3% (vs 0.4%). Growth also slowed in France (0.9% vs 1.1%) and Italy (0.8% vs 0.9%), whereas Spain slightly outperformed (2.7% vs 2.6%). On a quarterly basis, Eurozone GDP contracted by 0.2%, marking the first decline since 2022 and the steepest drop since the pandemic-era downturn in 2020.