ECB’s Makhlouf warns Middle East war risks worse inflation outcome in World Economy News 01/04/2026 European Central Bank Governing Council member Gabriel Makhlouf said Wednesday that a prolonged war in the Middle East could push the euro-area economy toward a worse outcome than the baseline scenario policymakers outlined last month. “As the conflict persists without clear resolution, a more prolonged period of higher prices becomes likely,” the Irish official said in a presentation. “This approaches the adverse scenario in the staff projections.” Makhlouf noted that energy prices currently sit between baseline and adverse scenarios, though “genuine uncertainty remains.” The adverse scenario projects inflation peaking at 4.2% late this year, with the economy contracting only in the second quarter. Slovenian central bank chief Primoz Dolenc told Reuters earlier Wednesday that the ECB’s baseline scenario “appears to be more like a best-case scenario for the future” and that “probably the current adverse scenario is more likely to be our next baseline.” Makhlouf said he and his colleagues will not be paralyzed by the current uncertainty, echoing recent remarks by ECB President Christine Lagarde. “We have a framework for monitoring how the outlook evolves and a credible commitment to act when data clarifies the direction of travel,” he said. “We are not pre-committing to a path and not ruling options in or out.” Data released Tuesday showed inflation in the 21-member euro zone jumped in March by the most since Russia invaded Ukraine in 2022. Source: Investing.com 2026-04-01 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share