Euro Area Economic Outlook
In 2026, GDP growth should slightly cool from 2025. Private spending and fixed investment growth are projected to decelerate, and higher U.S. tariffs are set to push down export growth. That said, growth in public spending should remain resilient, aided by infrastructure and defense outlays.
Euro Area Inflation
In October, harmonized inflation fell to 2.1% from the previous month’s 2.2%, but remained above the ECB’s 2.0% target for the second consecutive month. Our panelists forecast inflation to decline to just below 2.0% in 2026 as low oil prices and a strong euro keep price pressures in check. The impact of U.S. tariffs on global supply chains is key to monitor.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2024.
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| GDP per Capita (USD) | 39,067 | 44,007 | 42,477 | 46,272 | 47,900 |
| Investment (annual variation in %) | -6.0 | 3.7 | 2.2 | 2.7 | -2.1 |
| Policy Interest Rate (%, eop) | 0.00 | 0.00 | 2.50 | 4.50 | 3.15 |
| Industrial Production (ann. var. %) | -7.8 | 9.0 | 1.8 | -1.7 | -3.0 |
| Unemployment (% of active population, aop) | 8.0 | 7.8 | 6.8 | 6.6 | 6.4 |
| Public Debt (% of GDP) | 96.5 | 93.8 | 89.3 | 87.0 | 87.1 |
| Money (ann. var. of M2 %) | 11.0 | 7.1 | 3.6 | -0.8 | 3.2 |
| Economic Growth (Real GDP, ann. var. %) | -6.2 | 6.4 | 3.7 | 0.6 | 0.8 |
| Current Account Balance (% of GDP) | 1.8 | 2.7 | -0.3 | 1.6 | 2.6 |
| Merchandise Trade Balance (USD bn) | 390 | 345 | -51 | 282 | 387 |
| Private Consumption (annual variation in %) | -7.9 | 4.6 | 5.3 | 0.6 | 1.2 |
| Fiscal Balance (% of GDP) | -7.0 | -5.1 | -3.4 | -3.5 | -3.1 |
| International Reserves (USD bn) | 1,079 | 1,224 | 1,217 | 1,268 | 1,449 |
| Merchandise Exports (USD bn) | 2,397 | 2,876 | 3,026 | 3,051 | 3,043 |
| Merchandise Imports (USD bn) | 2,007 | 2,531 | 3,076 | 2,769 | 2,656 |