European Union officials warn that the European Union economy is facing risks of stagflation.

Valdis Dombrovskis, the European Commission Vice-President for Economic Affairs, said on the 27th that due to the surge in energy prices caused by the Middle East conflict, the European economy is facing the risk of stagflation. On that day, the Eurogroup held an online meeting on energy price issues. Dombrovskis said at a press conference after the meeting that the outlook is shrouded in high uncertainty and the EU economy is facing the risk of stagflation, which is a situation where economic growth slows down while inflation rises. "Even if the disruption in energy supply is relatively short-lived, this situation will still occur." Dombrovskis pointed out that due to multiple previous economic shocks in EU countries and the urgent need to increase defense spending, the policy space for most EU countries is very limited.