Deutsche Bank warns severe energy shock could push euro zone into recession in World Economy News 14/03/2026 A severe energy shock triggered by the Middle East conflict could push the euro zone into recession in 2026 and force the European Central Bank to reverse its easing path, Deutsche Bank warned ahead of the ECB’s March 19 policy meeting. The German brokerage laid out two scenarios. Under the milder case, at USD85 per barrel and at €50 per megawatt-hour, reflecting market pricing as of March 6, the hit to growth would be 0.30 percentage points below the pre-conflict baseline of 1.1% in 2026, with inflation overshooting by 0.33 percentage points. The adverse scenario assumes energy costs roughly 50% higher, oil at USD120 per barrel and gas at €75 per megawatt-hour, consistent with a recession in 2026. Under that case, inflation would overshoot the pre-conflict baseline by 1.02 percentage points in 2026 and 0.44 percentage points in 2027, while GDP growth would fall 0.72 percentage points below baseline in 2026. “The ECB could ’look through’ Scenario 1. It might not be able to look through Scenario 2,” the brokerage said. As of March 12, energy prices were closer to the milder scenario. The ECB’s updated staff forecasts, which ECB board member Isabel Schnabel confirmed on March 11 would partly capture the shock, are expected by Deutsche Bank to show headline inflation at 2.3% in 2026, up 0.4 percentage points from December, and GDP growth at 0.9%, down 0.3 percentage points. Markets are pricing approximately 30 basis points of hikes in 2026, against approximately 10 basis points of cuts before the conflict began Feb. 28. Deutsche Bank said a policy change on March 19 is “highly unlikely,” but flagged the possibility of risk-management hikes to 2.5%, the threshold ECB chief economist Philip Lane identified last year as “clearly restrictive,” without materially harming growth. The brokerage cited four inflation persistence risks: the scale of the energy price rise, household inflation expectations, labour market tightness and fiscal policy. Euro area unemployment remains below the non-accelerating inflation rate of unemployment. Labour shortages, while easing, “remain far from normal.” Deutsche Bank kept its baseline, ECB on hold at 2% through 2026, hiking in mid-2027, with rates rising 75 basis points by end-2028, pending further clarity on the conflict. The brokerage also cut its German growth forecast to 1% in 2026 from 1.5%. Source: Investing.com 2026-03-14 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