ECB: War in the Middle East has strongly hit consumption in the euro area
The ECB says consumer confidence and nominal consumption growth weakened, with wealthier households cutting discretionary purchases and energy spending the only category that rose.
The European Central Bank warns that the war in the Middle East has dealt a sharp blow to consumer spending across the euro area and that fresh geopolitical shocks could again stall the economic recovery.
Consumer sentiment and spending now weaker
Between February and April the Consumer Confidence Index (CCI) dropped by about 12 points — a decline the ECB describes as almost comparable in size to the 15-point fall recorded in the first two months after the outbreak of the war in Ukraine.
Nominal annual growth in household consumption slowed from the three to four percent pace seen in mid‑2024 to roughly 2.5 percent in April 2026.
The bank's analysis attributes the weakening largely to households postponing non-essential purchases. The biggest reductions occurred in spending on luxury clothing, shoes, sports equipment, travel and services such as recreation.
Households with higher incomes cut discretionary outlays most sharply as uncertainty rose, while lower‑income households — for whom a larger share of the budget goes on food and housing — curtailed purchases of durable goods and spending at restaurants and cafés. Nominal spending rose only in the energy category, reflecting higher fuel and transport prices.
The ECB highlights an additional risk tied to perceptions of personal income: in the April survey about 40 percent of respondents said they do not expect wages to make up for the loss of purchasing power caused by inflation linked to the war in the Middle East. "If citizens conclude that they will be able to buy less over the long term, they may continue to save rather than spend, which would further slow the euro area economy," the ECB adds in its report on its website.
Photo: press material from the event
