Finance
ECB's nagel says long iran war would push up inflation
Published by Global Banking & Finance Review®
Posted on March 5, 2026
2 min readLast updated: March 5, 2026
Quick Summary
ECB policymaker Joachim Nagel warned on March 5, 2026, that a prolonged Iran conflict could elevate euro‑area inflation and dampen growth, while noting that a swift end would limit the inflation impact. He also reported a substantial Bundesbank loss tied to bond stimulus and confirmed gold reserves
ECB's Nagel: Extended Iran Conflict Likely to Raise Eurozone Inflation
Impact of Iran Conflict on Eurozone Economy and Bundesbank Report
Potential Effects of Prolonged Conflict
FRANKFURT, March 5 (Reuters) - A long war in Iran would push up inflation in the euro zone and hurt growth but it is still too early to draw any conclusion about the conflict, European Central Bank policymaker Joachim Nagel said on Thursday.
Short-Term vs. Long-Term Scenarios
"If the conflict comes to a swift end...the consequences for inflation would be short-term and limited overall," he said in a speech.
"By contrast, if energy prices were to remain elevated for an extended period of time, this would tend to lead to higher inflation and weaker economic activity in the euro area."
Monetary Policy Considerations
He added it was still too early to draw conclusions for the setting of interesting rates.
Bundesbank's Annual Report and Financial Outlook
Nagel, the Bundesbank's president, was presenting the German central bank's annual report for 2025, which showed an 8.6 billion loss as a result of bonds bought during the stimulus programmes of the last decade.
While the losses were becoming smaller, Nagel expected the Bundesbank to close 2026 still in the red.
Gold Reserves Status
The annual accounts also showed the Bundesbank had not moved its 3,350 tonnes of gold, which remain stored in Frankfurt, New York and London.
(Reporting by Francesco Canepa; Editing by Toby Chopra)
Key Takeaways
- •A prolonged Iran war would keep energy prices high, boosting inflation and hurting euro‑zone growth; a swift end would mean only short‑term inflation effects.
- •Nagel presented the Bundesbank’s 2025 annual report showing an €8.6 billion loss from past bond‑buying programmes, with red figures expected again in 2026.
- •Germany’s gold reserves—totaling about 3,355 tonnes—remain stored abroad (New York, London) as well as in Frankfurt, with over 37 % still at the Fed’s New York vault.
Frequently Asked Questions about ECB's Nagel says long Iran war would push up inflation
1How could a long war in Iran affect eurozone inflation?
A prolonged conflict could keep energy prices high, leading to higher inflation and weaker economic activity in the euro area.
2What did Nagel say about the impact of a swift end to the conflict?
Nagel stated that if the conflict ends quickly, the consequences for inflation would be short-term and limited.