By Don Nico Forbes
Eurozone consumer sentiment plunged in March as the conflict in the Middle East sent energy prices soaring and piled further pressure on households.
The European Commission's flash consumer-confidence indicator for the eurozone stood at minus 16.3 compared with minus 12.3 in February. A consensus of economists polled by The Wall Street Journal expected a smaller fall to minus 14.1.
This is the lowest level since October 2023, according to the commission.
"Consumer confidence scores markedly below its long-term average," it said, an indication that Europeans became more gloomy about their prospects.
The war in Iran has intensified concerns about rising inflation across the currency area. According to Berenberg chief economist Holger Schmieding, a sustained rise in energy prices due to the conflict could push average eurozone inflation to around 2.7% this year, up sharply from a prewar estimate of 1.8%.
Economists say energy costs are already being passed onto consumers, squeezing incomes and putting the brakes on spending.
The reading comes at a delicate moment for the eurozone economy, with the spike in prices threatening to cast further clouds over households that were only just starting to recover from the energy shock of 2022.
Consumer sentiment hit record lows following Russia's invasion of Ukraine, while the savings rate also ticked up and settled at an elevated level.
The European Central Bank has been counting on a gradual recovery in household spending to support growth this year, even as global trade tensions--particularly uncertainty around U.S. tariffs--continue to weigh on activity.
Instead, sentiment appears to be moving in the opposite direction.
Last week, the ZEW Indicator of Economic Sentiment for Germany showed confidence among German investors plunging in March. This followed downgrades to global growth expectations for 2026 by leading economic institutes the Ifo Institute and the Kiel Institute for the World Economy.
Write to Don Nico Forbes at don.forbes@wsj.com
(END) Dow Jones Newswires
By Don Nico Forbes and Ed Frankl
Eurozone consumer sentiment tumbled sharply in March as the conflict in the Middle East sent energy prices soaring and piled further pressure on households.
The European Commission's flash consumer-confidence indicator for the eurozone stood at minus 16.3, its lowest point since October 2023, compared with minus 12.3 in February. A consensus of economists polled by The Wall Street Journal expected a smaller fall to minus 14.1.
The decline was the largest drop in the indicator since March 2022, when consumers were taking in the shock of Russia's full-scale invasion of Ukraine.
"Consumer confidence scores markedly below its long-term average," the commission said, an indication that Europeans became more gloomy about their prospects. Respondents were surveyed between March 1 and March 22, after the first U.S.-Israeli strikes on Feb. 28.
That meant the initial hit from the Iran war was more serious for eurozone sentiment than for President Trump's tariffs last year, Ankita Amajuri, Europe economist at Pantheon Macroeconomics, said in a note to clients.
"After spending the past two weeks focusing on upside risks to inflation, markets are now being invited to balance this against downside risks to growth," she said.
The war in Iran has nevertheless intensified concerns about rising inflation across the currency area. According to Berenberg chief economist Holger Schmieding, a sustained rise in energy prices due to the conflict could push average eurozone inflation to around 2.7% this year, up sharply from a prewar estimate of 1.8%.
Economists say energy costs are already being passed onto consumers, squeezing incomes and putting the brakes on spending.
The reading comes at a delicate moment for the eurozone economy, with the spike in prices threatening to cast further clouds over households that were only just starting to recover from the energy shock of 2022.
Consumer sentiment hit record lows following Russia's invasion of Ukraine, while the savings rate also ticked up and settled at an elevated level. But confidence had been creeping upward toward the end of last year.
The European Central Bank has been counting on a gradual recovery in household spending to support growth this year, even as global trade tensions--particularly uncertainty around U.S. tariffs--continue to weigh on activity.
Instead, sentiment appears to be moving in the opposite direction.
Last week, the ZEW Indicator of Economic Sentiment for Germany showed confidence among German investors plunging in March. This followed downgrades to global growth expectations for 2026 by leading economic institutes the Ifo Institute and the Kiel Institute for the World Economy.
Write to Don Nico Forbes at don.forbes@wsj.com
(END) Dow Jones Newswires
March 23, 2026 11:49 ET (15:49 GMT)
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