Euro Area Economic Outlook
GDP growth is set to cool from 2025’s three-year high in 2026. U.S. tariffs and Europe’s weak price competitiveness will weigh on export growth; moreover, private spending should rise at a softer pace as rising uncertainty likely prompts consumers to save more of their income. A prolonged conflict in the Middle East is a key downside risk.
Euro Area Inflation
In February, harmonized inflation rose to 1.9% from January’s multi-year low of 1.7%. Our Consensus as of 24 March is for inflation to broadly match 2025’s rate in 2026. Meanwhile, our panelists have promptly revised upward their inflation projection for this year following the start of the U.S.-Iran conflict. Higher-for-longer oil and gas prices are an upside risk.
This chart displays Economic Growth (Real GDP, ann. var. %) for Euro Area from 2010 to 2024.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Public Debt (% of GDP) | 93.8 | 89.3 | 86.9 | 87.0 | 87.8 |
| Fiscal Balance (% of GDP) | -5.1 | -3.4 | -3.5 | -3.0 | -2.9 |
| GDP per Capita (USD) | 42,563 | 41,161 | 44,824 | 46,418 | 50,174 |
| Economic Growth (Real GDP, ann. var. %) | 6.4 | 3.7 | 0.5 | 0.8 | 1.5 |
| Merchandise Exports (USD bn) | 2,876 | 3,025 | 3,051 | 3,044 | - |
| Merchandise Imports (USD bn) | 2,531 | 3,077 | 2,769 | 2,653 | 2,847 |
| Industrial Production (ann. var. %) | 9.0 | 1.8 | -1.7 | -3.0 | 1.4 |
| Unemployment (% of active population, aop) | 7.8 | 6.8 | 6.6 | 6.4 | 6.3 |
| Money (ann. var. of M2 %) | 7.1 | 3.6 | -0.8 | 3.2 | 3.0 |
| Merchandise Trade Balance (USD bn) | 345 | -52 | 282 | 391 | - |
| Current Account Balance (% of GDP) | 2.7 | -0.3 | 1.6 | 2.7 | 2.3 |
| Policy Interest Rate (%, eop) | 0.00 | 2.50 | 4.50 | 3.15 | 2.15 |
| Fixed Investment (ann. var. %) | 3.7 | 2.2 | 2.7 | -2.1 | 2.3 |
| Private Consumption (ann. var. %) | 4.6 | 5.3 | 0.6 | 1.2 | 1.3 |
| International Reserves (USD bn) | 1,224 | 1,217 | 1,268 | 1,449 | - |