Overview
- Oya Celasun of the IMF presented new estimates to the Eurogroup showing the average EU household faces a hit of about €375 in 2026 under current prices, rising to €1,750 in a severe shock.
- For Italy, the IMF pegs the loss at about €450 per household in the baseline and €2,270 in a severe scenario, which would force many families to cut other spending to pay energy bills.
- The IMF now projects Eurozone growth of 1.1% in 2026 and 1.2% in 2027, with inflation ticking up to 2.6% in 2026 before easing to 2.2% in 2027, and it warns a severe energy shock could push the bloc close to recession.
- The Fund says market expectations for energy are turning more pessimistic and notes sovereign borrowing costs have already risen, which can lift loan rates for banks and companies and weaken credit quality.
- Impacts differ widely by country, from about €620 in Slovakia to €134 in Sweden, and the IMF urges Europe to keep its carbon market (the ETS), complete the single energy market, and strengthen energy security to blunt future shocks.